The CEO of Steinhoff International has admitted that the troubled group will have to sell assets if it hopes to continue operations.
Speaking at an investor conference, Louis du Preez, CEO of the South African group, said the group’s only chance of survival was to divest assets and transform into a retail-focused investment holding company. Du Preez said selling off some assets would help improve profits at the group, adding: “We have to make sure the strong businesses are given the opportunity to keep performing.”
The group has already sold several assets and continues to look for ways to reduce its costs, as it struggles with around €9.1bn of debt and the impact of a $7bn accounting fraud, which sent shares in the group plunging in December 2017.
When asked about Pepkor – which owns the Poundland, Dealz, and Pepco chains in Europe – du Preez said: “We are looking at all options and there is definitely no decision made either way”. He added that the options being explored including an IPO.
Steinhoff has completed a 20-month process with lenders to delay debt repayments, which will now mature in December 2021. Steinhoff will not have to make cash interest payments until this date, which du Preez says offers the group much-needed stability to revive itself.
