JOHANNESBURG - Steinhoff International continued its fall yesterday after the embattled international retailer announced that its earnings for this year and 2016 would have to be restated.
Steinhoff shares eased 8.98percent on the JSE yesterday to close at R8.92, against the R14 the stock had reached on Wednesday.
The company said it was taking all necessary steps to address its audit issues on the advice of the independent committee of the supervisory board.
“The company, on the advice of the independent committee of the supervisory board, has today (Thursday) formed the view that issues concerning the validity and recoverability of certain Steinhoff Europe balance sheet assets under scrutiny in the 2017 audit work are also relevant to the 2016 consolidated financial statements,” the group said.
It admitted that its accounting irregularities stretched back to December 2015, pushing the shares 13.95percent down in early trade to R8.60.
Chief executive Markus Jooste resigned last week following an admission that the company was involved in various accounting irregularities. There was a dramatic fall in the share price, wiping out R190billion of its market capitalisation.
Christo Wiese was appointed interim executive chairperson of Steinhoff Holdings.Photo: Bloomberg
The group has made big acquisitions around the globe, including Mattress Firm in the US, Poundland in Britain and Fantastic Holdings in Australia.
The 80percent slump in the share price has put pressure on the board as the company has been forced to take debt in order to finance the acquisitions.
Steinhoff is set to meet its key lenders on Tuesday after the meeting was postponed this week. It is understood that the group will ask for extra time to repay more than 1bn (R15.98bn) owed on a revolving credit facility.
The group appointed US investment bank Moelis & Company and AlixPartners with immediate effect in a bid to reassure investors that it was serious about stabilising its business.
It said Moelis would support and advise on the group’s discussions with its lenders, while AlixPartners would assist on liquidity management and operational measures.
The supervisory board also addressed the issues of corporate governance in the group by setting up a subcommittee consisting of independent non-executive directors led by Johan van Zyl. Other members include Steve Booysen and Heather Sonn.
The group responded to last week’s events by setting up a Steinhoff supervisory board, with Christo Wiese appointed as interim executive chairperson and Pieter Erasmus joining as another executive, with PwC also appointed to perform an independent investigation.