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Steinhoff International Confirms Intention to Sell Assets

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Steinhoff International has confirmed its intention to sell off assets and restructure in a bid to cut debts and survive legal action - expected to be in the billions of dollars - from shareholders.

The group's accounting practices were called into question in 2017 with an investigation revealing that the company had overstated profits and assets by nearly $12 billion. The scandal resulted in the resignations of Markus Jooste (CEO) and Christo Weise (chairman).

Job losses have been confirmed at Conforma - Europe's second-largest home furnishings chain, and car dealership chain Unitrans has already been sold.  Steinhoff's current CEO, Louis du Preez, has said that a decision has not been made regarding the sale of Pepkor Europe - the parent company of Poundland, Bensons for Beds and Harveys in the UK.

Mr du Preez said: “We believe the only way for Steinhoff to survive is for it to become a pure investment holding company,”

"The group cannot trade itself out of this debt."

In a statement, he said: "The months of hard work on the financial restructuring have today come to fruition. Implementation of the Restructuring is a major milestone on our recovery journey, bringing with it the stability that will allow us to turn the page and concentrate fully on maximising value from our operating companies. The Company wishes to express its gratitude to its stakeholders for their support throughout the Restructuring. The Company remains committed to improving the performance of its operational businesses across the Group, reducing its debt, resolving the legal claims against it and delivering value for its stakeholders."

Last month, Steinhoff reported reduced losses of €356m (approx £315m), compared with £530 million in the previous year.  

Source : Insight DIY Team and Steinhoff

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15 August 2019

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