Captainfrom82, on 16 Aug 2019 - 11:07 AM, said:
Hey DTD and others,
It is a very interesting question. How indeed, will the NV debt be apportioned so that NV carries a nominal debt after the restructure.
Following the excellent Steinhoff Investor Day feedback, the Steinhoff strategy is clear. What is debatable is the sequence of events and timelines thereof.
I personally feel that Steinhoff should avoid any steps that improve the NAV until they have a handle on the quantum of the litigation (both shareholder and vendor). In this regard, Steinhoff NOT improve the equity position and/or reduce debt prior to the litigation being largely understood. I do not believe that it is in the current shareholder's interest to increase the equity or NAV prior to the litigation settlement?
Regarding the debt, clearly the vision articulated by the CEO of Steinhoff operating in future as a pure Investment Holding Company, would require firstly no consolidation of the accounting treatment. This would mean giving up control of all their businesses that is currently consolidated including both Pepkor Europe and Pepkor Africa. They would also have to unbundle all the smaller companies that they have control over.
Many of these non-core (not retail) businesses would be sold over the coming months and years.
Each one of these associate companies would then have to take the debt on their own balance (something that has already happened in Pepkor Africa, and is clearly happening at Pepkor Europe). Once these operating units are funding their working capital and capital requirements off their own balance sheet, the NV debt will be reduced to a minimum.
Note that for Steinhoff to account via equity and not consolidation methodology, they would have to give up lose control of both PE and PA. This would require that significant holdings will be sold (50.1% of PE and approximately 21% of PA).
Based on ZAR16.80 : 1Euro, Steinhoff would realise proceeds of around E700m from PA (21% of current market cap). It is questionable whether your SARB would allow these funds to be transferred outside the country. For PE, estimates put a valuation around E4b. with 50% of this roughly E2b which presumably would be used to pair the debt.
There is no evidence that Greenlit will follow an IPO (unless you know something buddy). However, I agree that they will give up 50% in order to shift to equity accounting.
The new NV will be a very different company 3 to 5 years from now.
Regards
Captainfrom82
Quelle: nachfolgend post 12
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