Hi Bubble,
I did some high level calcs to compare the situation of IPO 29% of Pepco Group and selling all of Pepco. Very interesting outcome and hopefully management will get to the same conclusion:
Looking at Dec 2021 - Situation of an IPO (71%) Situation of Selling Group (0%)
Debt levels as at Dec 2021 11.5 11.5
Unitrans sale -0.5 -0.5
Hemisphere prop -0.8 -0.8
Greenlit -0.5 -0.5
EBITDA for 3 years -2.5 -1.7
IPO / Sale proceeds -1.4 -4.5
Total debt to be refinanced Dec 2021 5.8 3.5
Now looking at the SUM Parts value as at Dec 2021:
Pepkor SA (71%) 4.8 4.8
Pepco Group (71%) vs (0%) 4.2 0
Confo (50%) 1.1 1.1
Greenlit (50%) 0.2 0.2
Mattress (49%) 1.2 1.2
Total SUM PV Dec 2021 11.5 7.3
Total Value left: 5.7 3.8
There one can clearly see that an IPO would be way more beneficial. The difference will be 1.9 Billion on a high level
Going forward they could refinance at 4% average interest. That would mean the following in 2022 on the income statement:
Interest on remaining debt as at Dec 2021 @ 4% -0.25 -0.15
Expected EBITDA Pepco Group 2022 (71%) 0.31 0
Total 0.06 -0.15
Again one can see that IPO is the better solution. Steinhoff needs to obtain at least around 6.5 Billion for the Pepco Group to sell the whole group.
Assumption:
Debt levels at operational levels not considered
Current cash held by group not considered
Legal claims not considered
Once off costs not considered
Again this is my personal opinion and no recommendation for buying or selling Steinhoff shares.
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