JOHANNESBURG - Steinhoff will sell part of its $700 million stake in KAP industrial, it said on Tuesday, part efforts by the scandal-hit South African retailer to plug a liquidity gap.
Steinhoff, which has more than 40 retail brands that include Conforama, Poundland and Mattress Firm, is fighting for survival after admitting“accounting irregularities” in December, wiping about 85 percent off its market value and throwing it into a liquidity crisis.
The company said it would sell 450 million shares, or 17 percent stake, in KAP via an accelerated bookbuild - a move that would reduce its holding to 26 percent - to raise cash for repaying debt.“Steinhoff continues to view KAP as a compelling investment case, especially in view of recent events in South Africa and the prospect of improving economic conditions,” Steinhoff said in a statement.
The election last month of Cyril Ramaphosa, who has promised to fight corruption and kick start the economy, has lifted confidence among business leaders in Africa’s most advanced economy.
KAP is a diversified industrial group involved in the selling of everything from chemicals, auto components and mattresses.
Steinhoff has already raised 7.1 billion rand from the sale of a stake in investment firm PSG Group as part of efforts to shore up its finances.
Standard Bank and Investec joint arrangers of the accelerated bookbuild.