Steinhoff wants to sell 29.5 million PSG shares to boost cash reserves

Cape Town - Steinhoff on Monday announced it is launching an accelerated bookbuild to place about 29.5 million shares in PSG Group Limited with qualifying institutional investors. 

Shares in JSE-listed PSG were trading at R246.99 on Monday morning at 10:00, down about 2.8%. 

The sale of the PSG shares would raise about R7.2bn for Steinhoff [JSE:SNH], which has been struggling with liquidity issues in the wake of an accounting scandal. 

Steinhoff, whose shares were changing hands at R8.41 at 10:00 - up 10% on the day -  already sold some 20.6 million shares in PSG in December last year for about R4.7bn. Following this sale, Steinhoff’s indirect interest in PSG was reduced from 25.5% to about 16.0%.

‘Acceptable pricing’ a must

The Stellenbosch-headquartered global furniture and homeware retailer said it would not get rid of the 29.5 million PSG shares “at any cost” as the price has to be acceptable. 

It did not give an indication of what an acceptable price would be. 

“The placing is being undertaken in order to be pro-active and prudent. Therefore, to the extent that acceptable pricing is not achieved, in the sole discretion of Steinhoff, the placing will not go ahead,” it said in a market announcement. 

PSG Capital and Standard Bank SA will be joint bookrunners.

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The announcement of the bookbuild comes four days after Steinhoff announced it is trying its stablise its financial situation by injecting additional liquidity into the group, by refinancing some loans and selling a “limited number” of assets. 

It has already sold its luxury Gulfstream 550 private jet to a US aircraft broker as it seeks to boost liquidity.

Steinhoff's share price has plunged by over 80% since early December, when its former CEO Markus Jooste abruptly quit amid an accounting scandal and it announced that PwC had been retained to investigate its books. 

The fashion and household goods retailer has delayed the publication of its 2017 audited financial statements, and has said its 2016 statements also need to be restated.