Steinhoff Units Seek `Significant' Funding as CFO Steps Down

(Bloomberg) -- Steinhoff International Holdings NV, the South African retail giant consumed by an accounting scandal, said some of its business units need “significant near-term liquidity” as its chief financial officer stepped down to focus on rescue efforts.

CFO Ben la Grange will be replaced by Philip Dieperink, finance chief for the company's U.K. subsidiary, the owner of France's Conforama and Mattress Firm in the U.S. said Thursday. La Grange will also work on completing the 2017 financial statements, while Steinhoff said it is seeking a chief restructuring officer to help rearrange its debt.

The company remains “committed to work with its lenders and other finance providers in finding solutions and to return liquidity to the group in order to stabilize the affected underlying operations,” Steinhoff said in a statement. It said it has “achieved some degree of stabilization in its operating businesses.”

Click here to read a Q&A on the challenges facing Steinhoff

The company's Pepkor Europe unit has received a 180 million-pound ($244 million) loan facility to replace planned investment from Steinhoff, according to a statement from Pepkor's Poundland unit in the U.K.

Steinhoff shares lost most of their value in the days following the Dec. 5 announcement of an investigation into its finances and the resignation of its chief executive officer. The stock rose 25 percent in Frankfurt on Thursday, extending a six-day rally.

The retailer said on Tuesday that its 2017 results will be accompanied by a restatement of its 2016 financial statements as well as the 2015 earnings of Steinhoff International Holdings Pty Ltd., the former Johannesburg-listed entity for the group. Steinhoff moved its primary stock listing to Frankfurt in 2015. The restatements won't affect its Steinhoff Services Ltd. business, which has bonds listed in Johannesburg.

Moody's Investor Services last week downgraded the company's credit by three notches, its second multi-step cut since the scandal and taking the Steinhoff deeper into junk. The ratings provider kept Steinhoff on review for further downgrades, saying the company may face challenges in being able to repay or refinance debt maturing this year.

To contact the reporter on this story: Vernon Wessels in Johannesburg at vwessels@bloomberg.net.

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Vernon Wessels, Eric Pfanner, Ana Monteiro.

©2018 Bloomberg L.P.