KAP: 500 -19 (-3.66%)
South Africa's Steinhoff raises $332 mln from KAP Industrial stake sale
(Adds share prices, background)
JOHANNESBURG, March 27 (Reuters) - Troubled South African
retailer Steinhoff said on Wednesday it had raised 4.8
billion rand ($332 million) from the sale of its 26 percent
stake in KAP Industrial to pay off debt and shore up
its finances, sending its shares higher.
Steinhoff admitted "accounting irregularities" in December
2017, shocking investors who had backed its reinvention from a
small South African business to a multinational retailer at the
vanguard of the European discount furniture retail industry.
This wiped about 85 percent off its market value and threw
the company into a liquidity crisis.
Steinhoff said in a statement it sold 694 million KAP shares
at 6.85 rand per share, a 9.4 percent discount to Tuesday's
closing price. The book of demand was oversubscribed, it added.
Steinhoff said on Tuesday the placement would be offered to
institutional investors only and will result in the company no
longer holding an interest in KAP.
Steinhoff shares jumped in early trade on the Johannesburg
Stock Exchange, and were up more than 6 percent by 0725 GMT.
Shares in KAP, a diversified industrial group selling
everything from chemicals and auto components to mattresses,
were down more than 7 percent.
In South Africa's biggest corporate scandal, an
investigation carried out by PwC found that Steinhoff recorded
fictitious or irregular transactions totalling 6.5 billion euros
($7.3 billion) over a period covering the 2009 and 2017
Steinhoff sold down its stake in KAP in March 2018 after
placing 450 million shares, or a 17 percent stake, also via an
accelerated bookbuild in a bid to plug a liquidity
Steinhoff has also raised cash from the sale of stakes in
South African investment firm PSG Group, French online
retailer Showroomprive.com, as well a property in Austria.
($1 = 14.4535 rand)
($1 = 0.8885 euros)
(Reporting by Olivia Kumwenda-Mtambo; Editing by Subhranshu
Sahu and Louise Heavens)
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