Steinhoff shares plummet as credit lines are withdrawn
Steinhoff shares slumped further Wednesday, as the South African based, mainly furniture retailer is facing a credit squeeze. In addition, the full details of the accountancy scandal are still being uncovered.
By 1100 BST, Steinhoff shares were trading 28.29% lower at €0.33. That’s less than a tenth of their value three months ago and almost half of the peak value of €6.09 achieved in 2016.
That ongoing sharp loss in share value, means Steinhoff’s market worth has plummeted by more than $10 billion in around two weeks of trading since the accounting scandal was first unveiled earlier in December.
Investors, banks withdraw financial support
Steinhoff prepared a presentation for its creditors at a meeting in London Tuesday. The beleaguered business told attendees it was already experiencing reduced, suspended and withdrawn credit lines from investors. Insurers are also withdrawing or cancelling credit insurance with the retailer.
And, if that wasn’t bad enough news for the meeting attendees, Steinhoff also admitted it still doesn’t know the full extent of the accounting scandal, or how far back it might stretch.
“Given the ongoing forensic review, it is not possible to provide further detail regarding…the magnitude of the accounting irregularities that are under scrutiny, whether any additional years financial statements may require restatement,” Steinhoff stated in its presentation.
German investors take legal action
In yet another blow to Steinhoff, German investors have also taken steps to take legal action against Steinhoff and sue the retailer in the hopes of regaining some losses.
According to a Bloomberg report, the case was filed against Steinhoff in a Frankfurt district court, Tuesday, by TILP law firm.
Meanwhile, Steinhoff has also unveiled its new board after previous Chief Executive Officer Markus Jooste and Chairman Christo Wiese, both left the firm once the irregularities were uncovered.
- The Steinhoff International management board now comprises:
- Daniel Maree van der Merwe, formerly COO, now acting CEO.
- Alexandre Nodale, CEO of Confroma group is now Deputy CEO.
- Andries Benjamin la Grange as CFO.
- Louis du Preez as commercial director.