Steinhoff’s debt too high – CEO

South African retailer Steinhoff’s total debt of over US$10,1 billion is “too high” and needs to be urgently addressed, new chief executive Louis du Preez said yesterday as the firm unveiled its restructuring plan.

“All the various debt instruments that previously existed will be re-issued. Secondly, the group at group level will not pay any cash interest,” he said in a presentation to investors.

“The debt in this group is too high; we acknowledge as the group that this debt is extremely expensive,” noted Du Preez, adding that the debt is expected to mature in December 2021 at interest rates between 7,87% and 10,75%.

Du Preez told investors the “only way to survive” is for the company to become a pure investment holding company mainly focused on retail, which is why most of its asset sales had been in property and shares rather than retail holdings.

Outgoing chief financial officer Philip Dieperink said France would be a key focus area of the restructuring plan, confirming the possibility of closures and retrenchments at furniture dealer Conforma already disclosed by Steinhoff in April.

A report released by PricewaterhouseCoopers (PwC) in March this year had stated that some company directors fabricated transactions worth more than N$100 billion, which resulted in the company painting a healthy financial picture. That picture had enabled them to secure loans and push up share prices, which are now haunting the company.

While the company had been selling off non-core assets, including its stake in wealth management and financial services firm PSG for a firmer financial standing, the company is still financially troubled, with some creditors intending to sue the company.

The N$100 billion fraud is said to have wiped out about N$15 billion of South African government workers’ pensions and social savings.

– Nampa-Reuters-Own report

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