Troubled retail conglomerate Steinhoff International has appointed an international advisory team, as the owner of furniture chains including Freedom and Fantastic Furniture looks to shore up its accounts.
Moelis & Company (Moelis) and AlixPartners have been appointed as independent financial advisor and operational advisor respectively with immediate effect.
Moelis will support and advise on the group’s discussions with its lenders, while AlixPartners will assist on liquidity management and operational measures.
Shares in the retailer plunged almost 80 per cent last week after the company’s recent announcements.
Shares in the South African retailer jumped as much as 40 per cent on Monday, regaining some ground after calling on its lenders to help stabilise the company following the discovery of accounting irregularities last week.
Steinhoff’s “accounting irregularities” and postponement of its results prompted the South African-headquartered, Frankfurt-listed retailer’s CEO Markus Jooste to quit.
The retailer said its rescheduled meeting with bankers in London to 19 December 2017 had been necessitated by having to postpone its financial report announcement.
“It has been Steinhoff’s practice to hold a private meeting annually with a group of its bankers from various countries for a number of years,” the company said.
“In these meetings, Steinhoff provided the bankers with information about the published financial statements and also provided certain information pertaining to the Steinhoff Europe group’s budget for the year ahead.
Last week, Steinhoff said the company’s subsidiary Steinhoff Africa Retail Limited (STAR) will now “formally commit” to the refinancing of its long-term liabilities due to the company.
“It is expected that the STAR refinancing will be concluded on better terms than those applicable to STAR’s current liabilities due to Steinhoff, given the strong cash flow inherent in its business.
“The additional liquidity of circa EUR2bn expected to be achieved through these measures will strengthen the company’s balance sheet and should provide additional comfort to stakeholders of the company’s ability to be able to fund its existing operations and reduce debt.”
The retailer – which is the parent of local furniture chains including Freedom and Fantastic Furniture – also said that based on current information, “there is no evidence to suggest” that the company’s chief financial officer had any involvement in the accounting matters currently under investigation by German prosecutors.
“Therefore, the company wishes to confirm that its CFO, Ben La Grange, remains in his position. Ben La Grange has resigned from his position as CEO of STAR in order to focus solely on his role as CFO of the company at this time,” the company said in a statement.
