On Wednesday the Steinhoff share price slumped almost 7% to 95c.
It was a case of ‘lots more of the same’ from Steinhoff’s 2019 annual financial statements. The fragile corporate entity that is Steinhoff International lives to fight another year – and payout more eye-watering fees to armies of legal and financial advisors.
Then there was the list of legal claims against Steinhoff, which featured surprising numbers of high profile South African business executives. It seems the 2015 purchase of 314 million Steinhoff NV shares, which was done in Upington’s name, relied heavily on bank loans and that Conservatorium has emerged as the ‘owner’ of some of an undisclosed portion of those loans.
On Wednesday the Steinhoff share price slumped almost 7% to 95c with one analyst describing the latest figures as yet more evidence that Steinhoff is a “zombie company”.He said that with the group spending another R3 billion on legal and financial advisory fees in the 12 months to end-September 2019 it was difficult not to suspect the company was being kept alive merely to generate fees for bankers, lawyers and auditors.
“It’s difficult to sell any of the large assets because of the uncertainty about underlying claims,” De Klerk tells Moneyweb.He said in December 2017 Steinhoff was centrally funded, which meant that a liquidation would have done a lot of damage to the underlying operations.The restructuring put in place since then means that all of the operations – Pepkor, Conforama, Mattress World, Pepco and Greenlit Brands – are now independently funded.
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