VIDEO - Steinhoff Raises $586 Million From PSG Sale to Boost Funds - Bloomberg

Steinhoff International Holdings NV raised 7.1 billion rand ($586 million) of shares in South African financial services firm PSG Group Ltd., the latest in a line of disposals aimed at shoring up the retailer’s battered balance sheet.

The owner of Mattress Firm in the U.S. and Poundland in the U.K. placed almost 29.5 million shares in Stellenbosch, South Africa-based PSG with institutional investors, Steinhoff said in a statement Monday. That’s on top of the 20.6 million 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 phone. “By selling out of a non-core asset, the company is better able to support its core, furniture businesses.”

The shares rose 3.7 percent as of 4:41 p.m. in Frankfurt, where Steinhoff moved its primary listing from Johannesburg in December 2015. PSG rose 0.2 percent by the close in the South African city to 254 rand, about 5.5 percent higher than the 240 rand price Steinhoff received for its stock. The retailer holds a 2.5 stake after the placement.

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Steinhoff has been identifying non-core assets to sell while holding talks with lenders about providing financial support. The company said Dec. 5 it had uncovered accounting irregularities and later announced it would have to restate accounts going back to 2015. Chief Executive Officer 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 $25 million, while French unit Conforama has disposed of a 17 percent stake in online retailer Showroomprive for 79 million euros ($97 million). That’s about half what it paid for the shares in May last year.

The PSG placing was carried out by PSG itself and the South African unit of Standard Bank Group Ltd.

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 Feb. 19. It had been due to make a decision on the case Monday.

https://www.bloomberg.com/news/articles/2018-01-22/steinhoff-plans-to-raise-620-million-from-second-psg-stock-sale