Published: Fri, December 08, 2017
Worldwide | By Isabel Fisher

Steinhoff drops 4 notches in Moody's credit ratings

Steinhoff drops 4 notches in Moody's credit ratings

Steinhoff shares lost a further 43% on Thursday, going from a December 6 price of 462,5 rand (nearly $34) on the Johannesburg Stock Exchange to less than 10 rand (73c) on December 8.

Steinhoff said earlier Thursday that accounting irregularities it disclosed Wednesday along with the resignation of its CEO could affect the valuation and "recoverability" of as much as $7.09 billion worth of assets-extending a stock market rout that has sent shares down 74% over two days. Nearly 10.3-billion euros has been wiped off the value of the company since Wednesday.

The owner of Conforama in France, Mattress Firm in the USA and the U.K.'s Poundland said late Tuesday that Chief Executive Officer Markus Jooste had quit after the discovery of accounting irregularities, although Chief Financial Officer Ben La Grange remains in place.

The rating agency said its review will focus on the findings of Steinhoff's investigation into accounting irregularities and the consequences for the company's credit profile.

Four current and former Steinhoff managers are under suspicion of having overstated revenue at subsidiaries, German prosecutors said this week.

Shares in the company were down 43% in South Africa and almost 40% lower in Germany.


The retailer's biggest shareholder is billionaire Chairman Christo Wiese, who has stepped in to take temporary charge of the company.

South African Deputy President Cyril Ramaphosa said the Steinhoff scandal was "catastrophic".

The PIC, which manages civil servants' pension funds, said in a statement it holds around 10% of Steinhoff's stock.

Considering the recent call for corporate South Africa to provide accurate reporting of its financials, the Minister will also have discussions with other appropriate regulators, like the Independent Regulatory Board for Auditors (IRBA), to assess any likely lapses in financial and auditing reporting.

He is best known for transforming budget grocer Shoprite from just six shops in the 1970s to hundreds of stores across Africa.

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