15225 replies to this topic

[DayTraderDad]

How much debt was written off with the conforama transaction?

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From what i am reading looks like Confo taking all debt and SNH taking the intercompany which if I am correct is about 1,7 bil. Andi can you confirm.

 

So for me this is the story:

 

Corporate debt excluding SINVH is: 8873

 

Less cash:     1795

 

Less Assets for sale: 1445

 

Net debt: 5633

 

EBITDA at 2021: 1200

 

DEBT/EBITDA: 5

 

Reasonable bedt able to be supported: 6000

 

Sale of PEPCO share will be to cover interest.

 

All done. Lets enjoy the ride.

 

Andi and Captain your thoughts

[Investment novice]

How much debt was written off with the conforama transaction?

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[DayTraderDad]

What a excellent result in the circumstances. This was the final step in my plan now Steinhoff is set for growth. Days of furniture shops are numbered and the winning recepy is the PEPCO plan high growth in a market with 446 mil habitants.

 

Any comments on the sale of Confo?

[Tom]

I think Steinhoff now has more than enough cash to pay for the operations, and extinguish the debt.

 

Steinhoff has manged to get some loans on the operations level at a rate lower than their CVA high rate.

 

I think Steinhoff should only focus now on refinancing at a reasonable interest rate, to replace the high ( 10% ) interest rate they have on the CVA debt, to a lower market related rate (used to be 5%) that could be now because of the lock downs downs to 2% or interest free from government stimulus.

 

I think Steinhoff now has a very good standing in the legal cases, after the win in the South African courts, where the South African law and court order clearly say that only Steinhoff can claim compensation for damage it suffered, and no shareholder (previous or current) in South Africa can claim against it or against Pepkore SA.

 

The business that Steinhoff holds now is very strong operationally, and actually delivers a higher Ebitda than most other retail business out their.

 

Retails business in general delivers a stable return, and yet Steinhoff managed to improve it, and the 3 months results till 31-March-2020 shows yet another increase in revenue (of 7%).

 

I think Steinoff has become much less risky than before.

 

I think the market is still stuck with the past mess, when the uncertainty was high.

 

Not all Steinhoff's debt is under the high 10% CVA interest rate, and the debt under the CVA can and should be refinanced, or renegotiated to a lower interest rate, specially with the lock downs the creditors can never dream of getting such high rate, that the debt interest rates worldwide are down.

Edited by Tom, 08 July 2020 - 05:21 PM.

[Tom]

I think Steinhoff now has more than enough cash to pay for the operations, and extinguish the debt.

 

Steinhoff has manged to get some loans on the operations level at a rate lower than their CVA high rate.

 

I think Steinhoff should only focus now on refinancing at a reasonable interest rate, to replace the high ( 10% ) interest rate they have on the CVA debt, to a lower market related rate (used to be 5%) that could be now because of the lock downs downs to 2% or interest free from government stimulus.

 

I think Steinhoff now has a very good standing in the legal cases, after the win in the South African courts, where the South African law and court order clearly say that only Steinhoff can claim compensation for damage it suffered, and no shareholder (previous or current) in South Africa can claim against it or against Pepkore SA.

 

The business that Steinhoff holds now is very strong operationally, and actually delivers a higher Ebitda than most other retail business out their.

 

Retails business in general delivers a stable return, and yet Steinhoff managed to improve it, and the 3 months results till 31-March-2020 shows yet another increase in revenue (of 7%).

 

I think Steinoff has become much less risky than before.

 

I think the market is still stuck with the past mess, when the uncertainty was high.

Edited by Tom, 08 July 2020 - 05:12 PM.

[Tom]

"The Disposal release Steinhoff from its liabilities in respect of that business", that in addition to Steinhoff getting a "a nominal sum".

Edited by Tom, 08 July 2020 - 01:49 PM.

[Sleepwa123]

https://www.sharenet...eq=17&scode=SNH

[Zanme]

I really don't know why you guys are saying management has taken up such a huge remuneration. In 2019 Total Management Board and other key management was the lowest since 2016. In 2016 total was 34 Million €. In 2019 this was only 29 Million €.

Also when Jooste was still CEO he got a total package of 8.5 Million €. Currently LdP is getting 2.7 Million € (Page 102 of the AFS 2019)

And trust me what management does goes far beyond with all the complicated matters they have to deal with.

R51 million is a lot of money. One cannot compare the salaries that was based on fraudulent performance of the company. The CEO'S of sound companies like Firstrand aren't even earning as much.

[Investment novice]

That's a fair point. Management should be reimbursed as part of a Share buyback and be allocated shares in the company.
This will help drive the share value and show commitment.
Steinhof requires transparency in order for management to buy shares. Not sure if they are still in a close period. Perhaps thats why they probably want price abit subdued... So potentially can buy some now...

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[andi222]

Why isn't management taking part of their remuneration as share appreciation rights in that way their interests will be aligned with shareholders and they won't be acting solely for themselves.

 

I really don't know why you guys are saying management has taken up such a huge remuneration. In 2019 Total Management Board and other key management was the lowest since 2016. In 2016 total was 34 Million €. In 2019 this was only 29 Million €.

 

Also when Jooste was still CEO he got a total package of 8.5 Million €. Currently LdP is getting 2.7 Million € (Page 102 of the AFS 2019)

 

And trust me what management does goes far beyond with all the complicated matters they have to deal with. 

[Zanme]

Why isn't management taking part of their remuneration as share appreciation rights in that way their interests will be aligned with shareholders and they won't be acting solely for themselves.

[Investment novice]

True....... Hope to see 2022

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[DayTraderDad]

Sorry Andi, I should have also thanked you for the detailed post. I am using the time afforded to us to load shares. I sold out my eoh shares today as I think that's a great share but growth for two years probably 100%, but nothing like snh and asc
Thanks to all for your comments around management and the sens... I thought I was going crazy.. But there is certainly a consistent strategy despite the irritation on the share value. This is a waiting game. And we should really look away for the month......every positive media post Is going to cause spikes.....

My question to all
What do you see the share ranges for specific scenarios....

Let's get some levels here. I understand it's arbitrary but we shod have some thinking here...

Legal settled, debt restructured, Lowe lr interest, legal claims settled by directors....50% pepko Europe provided to creditors at a favorable amount in settlement for debt.
Could we be at r12,

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As I have said before my target is R23 by 2022

[Investment novice]

Sorry Andi, I should have also thanked you for the detailed post. I am using the time afforded to us to load shares. I sold out my eoh shares today as I think that's a great share but growth for two years probably 100%, but nothing like snh and asc
Thanks to all for your comments around management and the sens... I thought I was going crazy.. But there is certainly a consistent strategy despite the irritation on the share value. This is a waiting game. And we should really look away for the month......every positive media post Is going to cause spikes.....

My question to all
What do you see the share ranges for specific scenarios....

Let's get some levels here. I understand it's arbitrary but we shod have some thinking here...

Legal settled, debt restructured, Lowe lr interest, legal claims settled by directors....50% pepko Europe provided to creditors at a favorable amount in settlement for debt.
Could we be at r12,

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[DayTraderDad]

 

I was asked whats my bet on the equity value of Steinhoff by DTD, I also wanted to share my opinion here to hear what you guys think as well:

 

There was an interview with the CFO last week where he said a rights issue is not even an option at the current share price level. I mean at the current share price they would need to issue 20 Billion shares to just get 1 billion € of fresh equity. This will not happen as the dilution would be huge and the number of shares in issue is limited to 17 Billion.

 

As mentioned before in my posts Steinhoff is pleading poverty. They are basically trying to show everyone that they do not have any value left in the company.

Examples:

- MF has been chosen to be equity accounted for. The value at the moment in the books lies at 9 Million €. However we all know that MF after Chapter 11 had an equity of around 1.5 billion $

- Conforama, Management knows that Conforama has a negative equity value of around 1.8 billion €. Why are they still consolidating Conforama. They could have made the decision to also equity account for Conforma. The decision was in the grey area according to IFRS. If Steinhoff would have equity accounted MF an additional 1.8 billion € equity would be on the books of Steinhoff.

- SA property portfolio and hemisphere. They have valued the properties way below current fair values if you have a look at the annual financial statements. Around 0.5 to 1 billion € to low.

- Pepkors share price is kept artificially low to show that its not worth anything. Also the mini issue of shares was to depress the price in my opinion. At the current share price Pepkor is trading at a EBITDA multiple of 5. That is a joke. Back when it was listed it was trading at an EBITDA multiple of 14. 

- Deferral of the IPO of the Pepco Group. This was not because of Corona in my opinion. They are deferring this IPO because they know exactly they will obtain billions and people will be able to see what its worth actually. The growth potential of this company is enormous.

- They have written off basically all of their Goodwill (Just kept Pepkor and Pepco) and immaterial assets even though they where not required to. Again they where in the grey area and made the decision to write down billions.

- Material counter claims- have you noticed that no big claim has been launched against third parties? Yes, they have launched some minor cases against Jooste etc but the amounts where super low. Steinhoff can and will launch legal claims against auditors, banks other advisors etc. Watch out after the global settlement, they want to see how big the amount will be which they will use to draft counter claims.

- Tax related items- Have you heard of anything claiming back taxes yet? No, because they are also deferring this because all the write offs will lead to huge tax claims for prior periods. Watch out for this after the global settlement. They have just included the a disclaimer in the audit report that tax items still need to be solved surprise surprise.

- many more points to consider as well.

 

I think this month is the absolute best time to get this global settlement under the table. I cannot see them pushing the value on the books lower then it currently is. It was also no surprise to me that they have moved the announcement of HJ 1 2020 results to end of July. Also it was crucial that the first shareholder claim was won by Steinhoff last month.

 

Again this is just my personal view. We can only wait and see what happens. What do you guys think?

 

Hi Andi thank you for the great post. I agree with you fully and share the same sentiment once the full claim is knows SNH will indeed get this back from directors and others. My take is maximum claim settlement will be about E2 bil of which this money will be sued from directors and deloite. I am not concerned at all by the Wiese claim because everything he will claim as vender will be sued off him as Chairman so best to settle for a low amount. I still believe all settlement will not be done to the cost of existing shareholders so interesting times ahead.

[Tom]

I just can't shake the fact that management always report passively and have gone to extreme lengths to depress the share price. Even when there was no immediate need to issue a second sens on the covid impact they announced it with doom and gloom. I always seem to wonder that they do want to show poverty but really to buyout and duelist the prized goose and realist it piecemeal... Not sure the intentions.

The afs is detailed and is a great step forward..... A golden goose for grand kids.....

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I did notice this sens on last week, and did think it was mentioned in the results of the same day already and wondered why is it necessary, and it's full of things that didn't help the share price.

Also the sens today, I'm wondering why is it necessary, and that it didn't add any information unavailable in the public sphere, and it's also mainly full of things that don't help the share price.

 

The management in a press issue said they will comment about their win in the south Africa court, (which I think is pivotal), yet so far no sense about this important court victory for Steinhoff.

 

The management of Steinhoff is one of the most highly paid managements and that's still in addition to the high bonuses they get, and that's alright if they're benefiting the company and the share holders, but they must also remember that share price is also important for the share holders.

Edited by Tom, 06 July 2020 - 07:05 PM.

[Investment novice]

Great volume coming through.... What am I missing...

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[Zanme]

I hope that it flies so that i can finally make back some of my losses. I wont sell because because i have to recover my losses and i think that the horse is an Arabian Stallion. I just don't like the way companies in general reward management before they win the race. Management splurging of the company's resources is what gave rise to this problem to start off with. So it must change. You right its good to have different perspective on things.

[Everlearning]

Sorry Zamne, it is clear that we both see the picture through different lenses. Some see the "glass half empty" and others will see it "half full" 

 

Like I said, if one does not like the horse, get out and back another one !

 

Anyway, it is good to have diffent views and healthy debate,  the great thing is, time will tell who was right !!!

[Zanme]

The operations are the same as they were before they did anything. What they have done is incurred loads of expenses that's all to restructure something that fundamentally has not changed and they didn't do it they paid consultants hundreds of millions to do so. Whilst us as shareholders are waiting for our pay day. Just think about it had they taken a view that they will not have this long drawn meaningless fraud investigation got around the table with banks to agree on the onerous terms that they did ultimately do. Christo Wiese is talking about brining him in for years instead they pay lawyers to talk to him. Who is paying for it we are as shareholders. How much would they have saved. I really don't understand what you saying that they have achieved wonders when the share price is stuck at the R1 level for sometime now. Most of us have lost loads of money on this share and are in it to recover what we have lost. But to praise management for keeping the share where it is I am very sorry doesn't fly with me.