Poundland owner Steinhoff to sell off assets in wake of $7bn accounting fraud

South African retailer Steinhoff, the parent company of Willenhall-based Poundland, has said selling off assets to become a retail-focused investment holding firm is its “only hope of survival” in the wake of a $7bn accounting fraud.

Steinhoff was hit by a huge crisis in December, when it revealed accounting irregularities that led to a 90% fall in its share price and the departure of chairman Christo Wiese.

Steinhoff bought Poundland in 2016 for £610m after a prolonged takeover battle, and also owns UK retailers Harveys and Benson for Beds.  Poundland’s immediate owner Pepkor Europe secured a £180m loan facility that is independent of Steinhoff in the weeks after the scandal broke.

The retailer’s chief executive Louis du Preez has now said its “only way to survive” was to transform into a pure investment holding company focused on retail.

Steinhoff is now looking to sell off its non-retail assets and cut jobs at its French retail chain Conforma.

He also said Steinhoff’s debt, totalling over 9 billion euros was too high and needed to be “urgently addressed”.

In April, it was announced that Steinhoff’s former chairman Wiese was launching a £3.4bn law suit against the company.

The South African retail magnate Wiese is relying on two claims in his lawsuit, which was filed by Titan Group, a vehicle for some of his family assets.

The claims relate to Wiese’s sale to Steinhoff of his retail businness Pepkor in 2015, when part of the payment was made in Steinhoff shares.

The second concerns money Wiese put into Steinhoff the following year that was used to pay debt and support the acquisition of Mattress Firm.

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