(Bloomberg) -- Steinhoff Africa Retail Ltd. said it is refinancing loans to its Frankfurt-listed parent Steinhoff International Holdings NV that amounted to about 16 billion rand ($1.2 billion) following an accounting scandal that has left the German retailer's finances in tatters.
FirstRand Ltd.'s Rand Merchant Bank has been appointed to handle the refinancing of the shareholder loans and ring-fence funding facilities for STAR, the Johannesburg-based company said in a statement on Friday. The financing structures to be created by RMB will be used to repay Steinhoff's shareholder-loan funding and provide STAR with stand-alone financing facilities, it said.
Steinhoff said on Wednesday its accounting errors stretch back into 2016, highlighting the extent of wrongdoing at the retailer that's led to an 80 percent slump in the stock since the beginning of last week. The retailer is due to meet with banks to try to navigate a way out of its crisis, which has wiped more than 10 billion euros ($11.8 billion) off the value of the company. Steinhoff's chairman and largest shareholder, South African billionaire Christo Wiese, stepped down from the supervisory board on Thursday while former Chief Executive Officer Markus Jooste quit last week.
“RMB is in the process of engaging certain banks and financial institutions” to set up STAR'S new funding facilities, the South African retailer said.
To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net.
To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Vernon Wessels, Helen Nyambura
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