Steinhoff freeing up 200 million shares in STAR to refinance its debt

Cape Town – As part of efforts to refinance its debt, Steinhoff [JSE: SNH] will sell off 200 million of its shares in Steinhoff Africa Retail (STAR). This is 6% of its stake in the company.

According to a notice issued to shareholders on Wednesday afternoon when markets closed, the decision is in line with intentions that were announced in a quarterly update issued on February 28 2018.

Steinhoff’s stake in STAR is currently at 77%. Steinhoff previously sold off part of its stake in KAP Industrial Holdings to help settle debt. Following the success of this sale, Steinhoff decided to go ahead with the sale of STAR shares in order to settle its remaining South African debt, the notice read.

The sell-down will also increase STAR’s required free float by the JSE to 20%. Following its listing in September 2017, STAR achieved a free float of 14%. The minimum requirement by the JSE is 20%. "The JSE granted STAR a dispensation on the basis that the free float would be increased to 20% over time," Steinhoff explained.

The shares will be offered to “qualifying institutional investors only” which includes private platforms, Steinhoff said. “Placing does not and will not constitute, nor is it intended to constitute, an offer to the public to purchase any share.”

The book build has been launched with immediate effect and is expected to close as “soon as possible”.

In March Bloomberg reported that the retail giant was mulling the sale of part of its stake in STAR. Steinhoff did not indicate how much the sale would raise.

Earlier Fin24 reported that the Steinhoff share price is trading at its lowest in 20 years.

The share closed trading on Wednesday 3.98% weaker at R2.41, from a R2.65 opening and an intraday low of R2.05.

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