NewsSouthern AfricaSteinhoff to place shares in PSG Group worth around $620 million


Posted on Monday, 22 January 2018 11:36

Steinhoff to place shares in PSG Group worth around $620 million

By Reuters

A worker at the Stock Exchange in Johannesburg, South Africa uses his mobile phone April 4, 2017. Phone:Denis farrell/AP/SIPASouth African retailer Steinhoff plans to sell about $620 million of shares in investment firm PSG Group as it scrambles to plug a liquidity gap after it disclosed "accounting irregularities".

The group, which owns more than 40 brands like Conforama, Mattress Firm and Poundland, said on Monday it would place around 29.5 million shares in PSG with institutional investors in an accelerated bookbuild.

Steinhoff owns 16% of PSG, which has a total market value of around 60 billion rand.

Steinhoff last month shocked investors with the disclosure of what it said were irregularities in its accounts which helped to wipe about $15bn, or 85%, off its market value.

Much-needed funds

However, it said in a statement on Monday the placement would only go ahead if it achieved acceptable pricing. "Steinhoff will not dispose of the Placing Shares at all costs, as the Placing is being undertaken in order to be pro-active and prudent," it said.

Steinhoff's top two executives have resigned, as well as its chairman, and the group is currently being run by an acting chief executive while its former finance chief works full-time on securing financing.

Sources familiar with the matter had told Reuters last month that Steinhoff was considering selling stakes worth a combined $1.4bn in PSG Group and KAP Industrial to raise much-needed funds.

Steinhoff owns 39% of diversified industrial group KAP, which is worth around 22.4 billion rand at current market prices.

PSG Capital Proprietary Limited and The Standard Bank of South Africa Limited are acting as joint bookrunners for the placement in PSG shares.


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