Steinhoff share price tanks while management takes home hefty packages

The freefall in the price was prompted by the news that the company had reached an agreement to defer its debt of around €10-billion, originally due next year, to be repaid in 2026. Ryan Woods, head of trading at Independent Securities, says if shareholders don’t agree to this deferred debt transaction, they will effectively be handing everything over to the creditors. “If the shareholders do approve it, they end up holding 20% of the company. However, bearing in mind that Steinhoff’s debt is roughly €10-billion, the creditors hold all the cards in this case,” he says.

“One could argue that it’s a damp squib since the company is technically insolvent and the whole listing is likely to come to an end anyway,” Woods says. Steinhoff has a primary listing on the Frankfurt stock exchange and a primary listing on the JSE locally.

“Pepco and Pepkor share prices haven’t exactly shot the lights out so the liabilities on Steinhoff’s balance sheet far outweigh its assets,” Woods says. Holding on to a 20% stake would keep the door open for shareholders to receive some kind of settlement or money in the liquidation process, but Woods says shareholders are being taken out on a stretcher and likely to receive next to nothing even if they hold out.

Management scores

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