Slump in Shares Price makes Steinhoff Record Low

The fear of Steinhoff on shares...... 

According Reports by media, its describe a web of complex and contrived transactions designed to disguise the group’s true financial position. They also indicate the accounting irregularities stretched back to before 2015, which was thought to be the starting point for PwC’s extensive investigation into the matter.

Thursday’s slump in the share price took it to within 50c of Steinhoff’s record low, hit in December.

And in another blow for the besieged company on Thursday the JSE suspended trading in Steinhoff notes with a face value of R1.5bn because the company has failed to publish its financial statements for the year to end-September 2017.

The notes are part of the R7.6bn issued by Steinhoff under its domestic medium term note programme, which comprised 12 issues with maturities varying between April 2018 and November 2022.

While 99.65% of holders of 11 of the issues voted in support of early redemption and had their notes redeemed last week, the majority of the holders of the 12th issue voted against early redemption. The JSE’s suspension means those note holders will no longer be able to trade.

One trader said the note holders had probably held out in the belief Steinhoff would be forced to offer better redemption terms but are now left stranded.

In a statement released on Wednesday Steinhoff chairwoman Heather Sonn said that despite the accounting irregularities and the delayed publication of the company’s 2017 results none of the regulators in Frankfurt or Johannesburg were currently seeking a suspension of the listing of the company’s ordinary shares.

"The company’s ordinary shares remain listed and traded on the FSE and the JSE and are expected to remain as such for the foreseeable future," said the chairwoman.

While the JSE’s regulations would force it to suspend the share, the decision is determined by Frankfurt, where the company has its primary listing.

Sonn also announced major changes in the Steinhoff board, with long-term directors being replaced by several new faces. Prominent Dutch lawyer Peter Wakkie will head up a new ethics committee.

by Moneyweb and German 
crottya@businesslive.co.za