Cape Town – Global retailer Steinhoff International extended its share price gains on Tuesday, more than doubling its stock price from its dismal close of just R6.00 on Friday.
By 12:01 on Tuesday, Steinhoff shares were trading up 35.72% on the day at R12.69
This after the Stellenbosch-headquartered owner of Pep and Ackermans in South Africa, Mattress Firm in the US and Conforama in France appointed advisers to strengthen its internal processes and to handle discussions with banks.
But the shares are still 72% down on where they were trading last Tuesday afternoon, before news of Steinhoff CEO Markus Jooste’s shock resignation amid an accounting scandal sent its stock into a precipitous decline.
The retailer announced in a note to shareholders after the markets closed last Tuesday that Jooste was stepping down “with immediate effect”, and that PricewaterhouseCoopers (PwC) would conduct an independent investigation into what Steinhoff termed “accounting irregularities requiring further investigation”.
The partial rebound started on Monday after Steinhoff appointed a board subcommittee headed by Sanlam’s former CEO Johan van Zyl, which included Dr Steve Booysen from the University of Pretoria’s School of Accountancy and Heather Sonn, managing director of Gamiro Investment Holdings.
It also said its group audit committee was working with its auditors Deloitte to ensure the release of its audited financial statements, and confirmed that PwC has commenced its investigation.
It said that, despite challenges, trade at its more than 40 brands would continue.
“Trading in the underlying businesses across the globe continues uninterrupted particularly in the pre-Christmas period,” the note read.
On Monday the retailer also announced the appointment of global investment bank Moelis & Company as an international advisory team, and consulting firm AlixPartners as operational adviser.
“Moelis will support and advise on the group’s discussions with its lenders, while AlixPartners will assist on liquidity management and operational measures,” the group said in a separate note to shareholders.
Steinhoff said it “is currently fully focused on safeguarding operational liquidity to continue funding existing operations throughout its various subsidiaries”.
The Dutch-registered retail conglomerate, which employs 130 000 people worldwide, has seen its market capitalisation dwindle from R199.3bn at market close late on December 5, to just R54.7bn at 12:01 on the JSE on Tuesday.
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