Marcia Klein

Marcia Klein

Steinhoff, the furniture and household goods manufacturer and retailer, has canned its black economic empowerment (BEE) deal.

This, and an announcement of a R1,5billion bond, saw the share slump 6percent yesterday.

Steinhoff had announced a deal for the sale of 20percent of Steinhoff Africa to existing partners in associate and subsidiary companies. The deal was expected to be valued at about R1,8billion.

But the company said yesterday that the deal was off because the BEE partners couldn't raise equity funding.

Steinhoff said that it had managed to raise the debt funding for the deal, but "as a result of volatile conditions in global equity markets over the recent past, the BEE investors have not been in a position to procure the required equity funding on appropriate terms.

"The debt funding package was conditional upon the required equity contribution being procured. The company would now implement an alternative empowerment ownership structure at group, rather than Africa, level.

It expected investors to include Steinhoff staff members and suitable community-based and empowerment groupings in South Africa.

The company also announced the launch of R1,5billion seven-year bonds.

Steinhoff said the proceeds of the bonds would be used for "general corporate purposes, including appropriate earnings-enhancing re-financing and balance sheet optimisation initiatives." - Business Times