149 replies to this topic

[Shi]

https://www.sharenet...3682ea67606fe60

Steinhoff faces angry shareholders as it renegotiates debt

Edited by Shi, 20 April 2018 - 04:25 PM.

[Investment novice]

I am not sure this was really good news... What is a global retailer doing buying top end apartments.... think there probably more to the story and it will not be a good one. At least they should be able to be liquidated fairly easily though so that positive.

this is not bad news- we know that there has been lots of personalised spending -  points to the nature of the sins.

jooste and kroonies wanted to enjoy shareholder money- they were not really out to defraud the company of billions and billions

[Investment novice]

 love the comment procrastinator. did you see van zyls comment- leaving now to allow the board to build for the future. do you think he has incurred reputational damage and is limiting the fall out?

the agm is going to be a sizzler from the questions already being posed to the company ....

 

 

[Procrastinator]

interesting article today on Steinhoffs purchase of residential property- at least this confirms that there is some recoverability of funds and not all is lost----

Ocean view, more like drop in the ocean of lost funds.
Now Van Zyl, looks like nobody wants to be holding this parcel now that the music has stopped.

[DividendTycoon]

interesting article today on Steinhoffs purchase of residential property- at least this confirms that there is some recoverability of funds and not all is lost----

I am not sure this was really good news... What is a global retailer doing buying top end apartments.... think there probably more to the story and it will not be a good one. At least they should be able to be liquidated fairly easily though so that positive.

[Investment novice]

interesting article today on Steinhoffs purchase of residential property- at least this confirms that there is some recoverability of funds and not all is lost----

[Investment novice]

I have received information from SNH that they will be posting a presentation for the AGM on their website at the beginning of the AGM.

 

 

[Investment novice]

hi

 

Thanks for the reply.  SNH @ R2 very tempting, although very high risk...

Still feel that the market is totally over reacting...Feels like Fair value has to be much more than R 2...lots of uncertainties though...

 

let's see what happens on Friday...good luck!

i think that is a reasonable market overreaction due to the concerns of fraud and looming legal cases.

moneywebs expose with the leaked emails also spooked the market to think that Jooste was moving around money to cook the books. the entire revenue was not cooked rather marginal percentages that would allow him to meet expectations. this is certainly not an enron. having read through the paradise papers and panama investigations- Steinhof had not accounted for some of their property sales and this has been subsequently revaluated by the board and disclosed. the board for now is on the right path. the market though needs convincing that there is value and this is a massive cleanup operation rather than a salvage operation. the board needs to communicate more on this convincingly

[Machine#curious]

hi

 

Thanks for the reply.  SNH @ R2 very tempting, although very high risk...

Still feel that the market is totally over reacting...Feels like Fair value has to be much more than R 2...lots of uncertainties though...

 

let's see what happens on Friday...good luck!

 

[Investment novice]

Hi

 

When should there be news regarding the possible suspension on JSE?

 

Do you see a move in the share price after a successful AGM on Friday?

 

Any timeline for possible release of 2017 AFS?

IMO I am uncertain as the outcome of the AGM and movement of the share price may be downward as SNH have been communicating poorly and all resolutions have been proposed to merely endorse the current board and a few new appointees. for 2018 I would vote and endorse this to allow for stability for review at the special agm to approve 2017 results. The JSE has an expectation that 2017 results may be published by June, however expect this to be done by end 2018.

The market has pushed this share downwards to you may anticipate that FEDUSA will make a noise around replacements of board members and the outcome may or may not be good. if the proposed board members are appointed there should be upward movement in favour of stability.

I have requested information from SNH on whether or not they will have a presentation and updates - have not received any information.

during the QA time at the board meeting- this is an opportunity to get further clarification and we hope that direct questions are posed which gives an indication of the issues at stake.

Example- is your debtors days better or worse than the market? are your suppliers happy? have you met or exceeded your growth expectations? is there a strategy to introduce new businesses and product lines to the USA market;

why is PWC audit taking so long when they should have already have in debth knowledge of Pepkor and all the subsidiaries as they signed off the Pepkor 2015 accounts

have the investment bankers who have supported the listing in 2015 of SNH supported SNH through this period and what are there views on their liability.

etc...etc...etc

[Investment novice]

hi, expected to see some outcome on suspension yesterday however will have to wait and see as there may be lots of legal deliberations in the background. it could be a temporary suspension as the link between Steinhoff and Star is 70% worth of shareholding and the remaining businesses except for mattress firm are on a positive footing.

 

Two important points of note from my last chat share-

 

1. there is significant information on google around Pepkor and the relationship with Fulcrum; Southern finance; Capfin and Campian capital. These were not hidden entities for sure. However payments and movements of funds , loans to these entities may be questioned - there may be some recoverability and shared liability- or completely right offs. The debtors book and debtors days will be interesting disclosure however I expect this to be reasonable as cash may have been used up to sort some of this up. The IFRS accounting of all the above transactions and reporting requirements will be questioned but there is significant vagueness on regulation and compliance requirements. Viceroys report is quite interesting here as the 3 scenarios on defaulted debt and lost capital is accounted for in their discounting.

 

2. regarding revenue and growth- Steinhoff acquisition of management teams and their ability to  roll out of new stores, new business lines and operationalization is very noteworthy. there is a massive opportunity to ensure cross selling and individual business expansion into new regions. The USA has a massive market- and that's perhaps what Steinhoff was after- mattress management team, and footprint to allow it the speed of scaling up new product lines.

 

The Steinhoff assets are extremely valuable and following disclosure, this is definitely an asset that a company with deep pockets is going to go after- it may be that South Africa STAR and PIC are allowed to purchase the remaining Steinhoff assets at a discounted value rather than offer it to a scavenger to offsets the debts covenants and interest repayments. This may be the reason that Discovery , Investec and Nedbank and many others are mopping up the Steinhoff shares at these prices- as there is certainly hope that even if suspended trading- the shares will still allow the owner some right to assets even if it is after debt settlement.

 

The SNH price at R2- this is already a treat- an extremely high risk treat- but worth the risk- even if it is only a dream that you buying

 

 

[Machine#curious]

Hi

 

When should there be news regarding the possible suspension on JSE?

 

Do you see a move in the share price after a successful AGM on Friday?

 

Any timeline for possible release of 2017 AFS?

[Investment novice]

The VEB law suit was one of the biggest contentions impacting the valuation. this was an unknown factor impacting many analysts. the serious concern was the quantum. however VEB indicated that they are after a number of stakeholders and their target would be deloitte and the investment banks doing the listing- all of who have deeper pockets and liability malpractice insurance.

VEB stated categorically that they are non profit and aiming to assist shareholders derive some retribution. They do not want to bankrupt the company in this instance. looking at the quantum of shareholder value lost and a court settlement in the region of 2 billion euros, the shareholders will make very little from a court case victory and have more to gain from Steinhoff recovery, as can be seen with Tesco in the past few months.

the worse case scenario has already been factored in and more I guess with a R2.40 per share valuation.

market is awaiting JSE feedback on whether the share will be suspended.

 

I have been studying this as a case study to understand the market response, media impact, and company actions. have been correct on most instances except for 1 point related to internal governance - which Christo Wiese confirmed was lacking - including vagueness on the delegation of authority- but this has been disclosed already in viceroys report and worse case is that all the cash is spent and the total is an 8 billion euro impairment.

 

the viceroy revenue projections with 3 scenarios also point to a high road revenue scenario which they then price the share favourably. and if you go by there report and their worst case scenario you get Steinhoff trading at least r15 ish thumb suck.

 

 

will Steinhoff be solvent?

 

as this is enron like but not a complete enron- 130000 employees and many more shareholders impacted - there is a market need to save the company. PIC could step in acquire all the debt; Naspers sitting on a cash pile could purchase the entire business at R15 a share and this would still be a steal to get the entire supply chain and logistics and footprint with management staff. imagine the power of online and store footprint with a captured target market.

 

I worry about Mattress firm- but they have many options- which are already in play. there is no reason why Pepco pundland and other businesses cant be introduced quickly to the usa now that you have a USA presence...

 

there are still many options.

 

the way forward:

 

Steinhoff has bought time as there is a criminal investigation not just a delay with financial representation. Also- money misappropriated can be traced and recovered al beit in 10%. the interesting aspect is that Christo Wiese is relate dto the off balance sheet structures and Steinhoff can go after his money- as can be seen with the recent recovery of funds. we all rather see Christo as a loser  more so than the farm workers who have saved all their lives.

 

I have been buying Steinhoff as funds avail. this is part of my high risk portfolio. I will continue to buy even until suspension where I expect then share may drop to 20c. suspension is not always  permanent....this will however mean funds are locked away for 2 years....but this is unlikely as Discovery and a number of private buyers have been mopping up the shares daily. I would love a detailed analysis of the shareholding changes and an indication of the stockpilers. Steinhoff have refused my request for shareholder information

 

 

 

 

 

 

 

[DividendTycoon]

Confirmation bias- yes I think that is the diagnosis- with an addiction for these shares especially at R2.50

 

Steinhoff sold 200 million shares this morning and locked in the remainder for 3 months. with conviction that they want to remain invested in STAR.

I spent yesterday searching through articles on all the individual companies and was surprised by managements efforts to drive business grow and continued investment in new facilities. Conforama has a 200000 m2 wherehouse being built phase 1 ready end july and completion 2019. poundland pep co store in store growth almost another 200 stores. mattress firm downsizing but sales and increased market share has prompted analysts to down grade tempur sealy due to matress firms stance- despite of course online competition. eurpean online sales growth...etc...etc..this is fantastic news that is not coming through the media.

 

this is no doubt a high risk investment, but I do pray for the many that have more than me invested in this. I am also concerned about media bias and why there is a dearth of balanced reporting.

 

Please refer to warren ingrams interview in December - very balanced

Good luck, sounds like you have done your homework. Too risky for me as it is such a massive company with so many different moving parts I would not be able to work out if it a good bet. Have you factored in possible liabilities such as lawsuits?

I also suffer from confirmation bias, have been adding GPL as share price sinks, but here at least I think I have a grasp on value as Balance Sheet easy to understand.

[Investment novice]

Confirmation bias- yes I think that is the diagnosis- with an addiction for these shares especially at R2.50

 

Steinhoff sold 200 million shares this morning and locked in the remainder for 3 months. with conviction that they want to remain invested in STAR.

I spent yesterday searching through articles on all the individual companies and was surprised by managements efforts to drive business grow and continued investment in new facilities. Conforama has a 200000 m2 wherehouse being built phase 1 ready end july and completion 2019. poundland pep co store in store growth almost another 200 stores. mattress firm downsizing but sales and increased market share has prompted analysts to down grade tempur sealy due to matress firms stance- despite of course online competition. eurpean online sales growth...etc...etc..this is fantastic news that is not coming through the media.

 

this is no doubt a high risk investment, but I do pray for the many that have more than me invested in this. I am also concerned about media bias and why there is a dearth of balanced reporting.

 

Please refer to warren ingrams interview in December - very balanced

[Investment novice]

Confirmation bias- yes I think that is the diagnosis- with an addiction for these shares especially at R2.50

 

Steinhoff sold 200 million shares this morning and locked in the remainder for 3 months. with conviction that they want to remain invested in STAR.

I spent yesterday searching through articles on all the individual companies and was surprised by managements efforts to drive business grow and continued investment in new facilities. Conforama has a 200000 m2 wherehouse being built phase 1 ready end july and completion 2019. poundland pep co store in store growth almost another 200 stores. mattress firm downsizing but sales and increased market share has prompted analysts to down grade tempur sealy due to matress firms stance- despite of course online competition. eurpean online sales growth...etc...etc..this is fantastic news that is not coming through the media.

 

this is no doubt a high risk investment, but I do pray for the many that have more than me invested in this. I am also concerned about media bias and why there is a dearth of balanced reporting.

 

Please refer to warren ingrams interview in December - very balanced

[DividendTycoon]

Agree Polly, this is dangerous times for the share as the market seems to be panicking with any news even when there is upside.

 

I have been very optimistic and for some reason seem to see good in all the news. For example the revelation of payments to Wiese and the repayment of almost 350 m euros. this means that there will be some recoverability for other payments made similarly to wiese owned entities which are off balance sheet related.

the balance sheet valuation has been factored into the initial 6 billion impairment . and q1 2018 results are behind 2017 q1 after the adjustment only.

lastly- there is bench strength with star assets and the remainder which suggests that these can support debt restructuring- since most of debt is now owned by new entities who purchased this at a significant discount. 

 

I see this share recovering to r12 by August and potentially R24 by Jan 2019. Majority of the shareholders are still holding on to the share, and the death blow will come by July 2018 if 2017 financials don't stand up.

Be careful of confirmation bias here... Hope you right because you seem to have invested a lot, but fear you could be suffering confirmation bias and not wanting to believe anything bad about this share..

[Investment novice]

Agree Polly, this is dangerous times for the share as the market seems to be panicking with any news even when there is upside.

 

I have been very optimistic and for some reason seem to see good in all the news. For example the revelation of payments to Wiese and the repayment of almost 350 m euros. this means that there will be some recoverability for other payments made similarly to wiese owned entities which are off balance sheet related.

the balance sheet valuation has been factored into the initial 6 billion impairment . and q1 2018 results are behind 2017 q1 after the adjustment only.

lastly- there is bench strength with star assets and the remainder which suggests that these can support debt restructuring- since most of debt is now owned by new entities who purchased this at a significant discount. 

 

I see this share recovering to r12 by August and potentially R24 by Jan 2019. Majority of the shareholders are still holding on to the share, and the death blow will come by July 2018 if 2017 financials don't stand up.

[Polly]

This share is trading at a very delicate stage of its history imo

Could be sudden suspension on JSE

 

Covered and closed  of all my shorts for 50% profit

[Snippit]

Doubt the "hawks" will get anywhere given that they were a zupta project.

Shush mense, shuuush... them gismos are listening in and plotting their next shiite against us all for the benefit of their royal sponsors that use taxpayer money for everything that keeps their self empowerment BEE buzzing