STAR to distance itself from Steinhoff

Jayendra Naidoo, the chairman of Steinhoff Africa Retail (STAR), said at the AGM held on 15 March that should Steinhoff decide to sell its entire 77% stake in STAR, there would be little difficulty in placing the shares with institutional investors.  Selling its STAR stake at the current market price would generate about R60bn for cash-strapped Steinhoff.

In 2017, Steinhoff injected its holdings in Pep, Ackermans and JD Group to form STAR, which was listed on the JSE in September of that year.

During the meeting, Theo Botha, a director of Proxy View, raised concern about the hefty amount of goodwill — R2.2bn — included in the R3.35bn purchase of Tekkie Town from Steinhoff. He said a transaction in November 2014 had valued the company at R1.7bn.  In 2016 Steinhoff bought 42% of Tekkie Town from private equity firm Actis and the remaining 58% from Braam van Huyssteen, who founded Tekkie Town and was subsequently appointed chairman of STAR’s property committee.

STAR CEO Leon Lourens told shareholders at Thursday’s meeting that Tekkie Town had been acquired as part of the formation of STAR. He said based on its performance, the board believed the R3.35bn price tag for the footwear chain was reasonable.

During the meeting, directors made several references to the need to distance the company from Steinhoff.  “Since December our priorities have been to distance STAR from Steinhoff and make ourselves financially independent,” Lourens told the meeting.

Naidoo said a name change was under discussion and he hoped there would be a new name for the firm before the 2019 annual general meeting.

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