Steinhoff shares plunge 60% as CEO Markus Jooste quits

07 December, 2017, 02:22 | Author: Roderick Gutierrez
  • BRITAIN-EU-BREXIT-ECONOMY-RETAIL-CHRISTMAS

Steinhoff moved its primary stock market listing from South Africa to Frankfurt in 2015.

In October, Steinhoff bought back 78 million shares, a deal handled by Johannesburg-based PSG Capital.

Steinhoff's chairman, retail tycoon Christo Wiese, alongside former Pepkor CEO Pieter Erasmus, will run Steinhoff until a new CEO is appointed, a statement issued at 10.45pm on Tuesday night said.

Over near two decades Mr Jooste has overseen Steinhoff's expansion from a South African furniture manufacturer to one of the world's biggest household goods retailers.

Steinhoff's stock was down by 68 percent in Frankfurt on Wednesday, while its latest bond sold in July fell by more than 40 points, after the company said late Tuesday that "new information has come to light today which relates to accounting irregularities requiring further investigation".

The group has been under investigation for suspected accounting irregularities by the state prosecutor in Oldenburg in Germany since the same year.


The chief executive's resignation will take effect immediately showing how serious it is. Attempts to contact Jooste were not immediately successful.

Omri Thomas of Abax Investments, the 15th largest investor in Steinhoff, said because there was no immediate prospect of any clarity on its results, it was hard to put a value on Steinhoff and this had prompted the severe share reaction. Steinhoff Africa slumped as much as 29% in Johannesburg, while Shoprite plunged as much as 6.3%, the biggest fall in nearly a year.

It is being reported Steinhoff did not tell investors about transactions amounting to almost $1 billion (R13,5-billion).

It said it would also investigate whether previous financial results need to be corrected.

Steinhoff International debt also plunged, with €800m of senior unsecured bonds due in 2025 falling as much as 41 cents on the euro, to 42 cents, according to data compiled by Bloomberg. The company has transformed itself in the past four years from a mostly African-focused retailer to an acquisitive powerhouse that now owns Mattress Firm in the U.S. and Poundland in the UK.

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