South Africa’s Steinhoff International — which owns the Dealz-Poundland stores in Ireland — plans to sell almost 7.5bn rand (€509m) of shares in South African financial services firm PSG Group, the latest in a line of disposals aimed at shoring up the retail group’s battered balance sheet.
The owner of a string of retail businesses across Europe and the US started to sell about 29.5m shares in South Africa-based PSG with institutional investors, Steinhoff said.
That’s on top of the 20.6m PSG shares sold late last year at the start of an accounting scandal that’s wiped out most of its market value.
“This is positive for Steinhoff as it will secure a decent bit of liquidity out of a fairly well-priced asset,” Alec Abraham, an analyst at Johannesburg-based Sasfin Securities Ltd., said.
“By selling out of a non-core asset, the company is better able to support its core, furniture businesses,” the analyst said.
The shares rose as much as 13% in Frankfurt, where Steinhoff moved its primary listing from Johannesburg over a year ago.
PSG shares fell over 1% in Johannesburg. After the proposed sale, Steinhoff will still have a 2.4% stake in PSG. Steinhoff has been identifying non-core assets to sell while holding talks with lenders about providing financial support.
The company last month said it had uncovered accounting irregularities and would have to restate accounts going back to 2015. Chief executive Markus Jooste and chairman and biggest shareholder Christo Wiese have both resigned.
The company earlier this year sold a luxury Gulfstream 550 private jet that had once been valued at €20.5m, while its French unit Conforama has disposed of a 17% stake in online retailer Showroomprive for €79m.
That’s about half what it paid for the Showroomprive shares in May last year. The PSG placing is to be carried out by PSG itself and the South African unit of Standard Bank Group.
Separately, Amsterdam Court’s Enterprise Chamber delayed a verdict on a case brought against Steinhoff by a former joint-venture partner until no later than February 19.
It had been due to make a decision on the case yesterday.
Last week, the chief of Poundland-Dealz told the Irish Examiner it was not affected by the group’s difficulties and plans to open 10 more Dealz stores, increasing its outlets to 71 in the Republic, by the end of the year.
Bloomberg and Irish Examiner