15225 replies to this topic

[andi222]

Yes will be interesting to see how much they will IPO. 

 

everyone is waiting for an announcement regarding claims.

 

Also looking forward on seeing the Q1 Trading Update in Feb and then AFS which are due April. 

 

For now all we can do is wait and see.

[Investment novice]

Steinhoff listing of poundland etc progresses. According to morningstar uk.

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[MrGermanGuy]

Invesco sold for 5 to 6 €ent, geniuses on work. We will know in the future for a reason or even not..

[andi222]

Invesco has sold 85 Million shares during Nov and Dec.

Does anyone maybe know why?

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[Captainfrom82]

If everything is written off what is next?

if restructuring costs will disappear what is next?

if legal conflicts are solved what is next?

If debt restructuring will happen what is next?

 

high risk but if this works out 

 

Dear Mr GermanGuy,

 

I will take a bite at answering your questions:

 

1. If everything is written off what is next?

I assume by "written off" you are referring to my statements in respect of the impairments.  In conventional terms, this means that from an Accounting and Legal perspective, there is very little if anything to offer as a settlement to the litigant shareholders and litigant vendors.  Unless, they are willing to accept a significantly lower settlement, Steinhoff has nothing to really offer.

 

This is a perfectly acceptable position, and it is up to the litigants to either accept or challenge this.

 

 

2. if restructuring costs will disappear what is next?

While the restructuring costs are high, they are not a sustainable cost.  They are over the current/short term accounting period of one year, but they should not be something that will be on the books on 4 years from now.  Theoretically, the net income should be correspondingly higher or the net loss slightly smaller  (but not the earnings due to the after tax impact).  The EPS or LPS should be also different depending on if there is a material change in the number of share in issue.

 

 

3. if legal conflicts are solved what is next?

In all the universe, nothing is weighing down more on the Steinhoff shares.  Not the creditors, nor the poor performing businesses, not even the now historical fraud.  It the lawsuits are settled, Steinhoff will almost immediately become a fully investable business for almost all institutional investors.  The two most valuable businesses PepCo and Pepkor have provided a staggeringly good return for shareholders.  The Law of Diminishing Returns suggests that this cannot continue ad infinitem.  But, these businesses (especially PepCo) are still in growth phase.  The greater than  historical average 24% pa compound growth in earnings still has a lot of years to come. 

 

If the lawsuit is settled, this is a Saturn V rocket strapped onto the company...

 

4.  If debt restructuring will happen what is next?

For the most part, the debt restructuring has already happened in August 2019.  If however, you are now referring to the period beyond the 2021 year when the current CVA ends, this depends on what has happened until then. 

 

Steinhoff has already made enormous progress in this regard.  There will be various debt for equity swops, including with the PepCo IPO. 

 

It is also very likely, almost a given really, that Debt may be restructured again in 2021, with the debt refinanced at a materially lower, market related interest rate. 

 

I also think that there may be additional assets sold off, including the European (Hemisphere) properties division.  I am still not totally convinced that Steinhoff will retain their 50.1% of Conforama in 5 to 10 years from now.  In fact, I think that they will review their entire furniture and household businesses and may make a push to retain only their clothing business like Pepkor and PepCo.  Possibly, they may make another foray into Shoprite or similar at some point in the future.

 

 

This is all very speculative, and are entirely my own musing.  Please treat with caution.  This is not investment advice.

 

Best Regards

Captainfrom82

Edited by Captainfrom82, 29 December 2019 - 03:00 PM.

[MrGermanGuy]

If everything is written off what is next?

if restructuring costs will disappear what is next?

if legal conflicts are solved what is next?

If debt restructuring will happen what is next?

 

high risk but if this works out 

[Captainfrom82]

Andi,

 

easy, the market is playing this as only negativ  equity and open lawsuits.

if this will be solved in the next couple of months to years we can talk about value and the comeback to several indexes.

 

 

If only it was zero, there would be hope.  Its substantially less than zero.  I had a look at the true value of the operating businesses, less the debt burden i still get a value less than zero.  Jooste messed up properly, with no recourse?

 

 

Could you please break down your valuation for each operating business and the valuation method you have used?

It looks like we are then miles apart reagrding valuation and I want to understand how you get to your conclusion.

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Either way Mr German Guy, it would be useful to see SoleTrader's numbers and methodology. 

 

• At what value do you think Confo is being carried in the Steinhoff books?  Quick answer = zero.  Yet Confo was provided E316m financing for 49.9% of the business by the lenders.

• It is interesting that Mattress Firm was acquired for E3.8b in 2016, and yet by 2019, is recognised at E44m in the 1H19 financials for the 50.1% that Steinhoff control.  (Note that the financiers provided $525m for 49.9% of MF).  The earlier impairments to the goodwill and brands of Mattress Firm resulted in a decrease in total equity at 1 October 2017 of €1.5 billion.

 

Best Regards

Captainfrom82

[MrGermanGuy]

Andi,

 

easy, the market is playing this as only negativ  equity and open lawsuits.

if this will be solved in the next couple of months to years we can talk about value and the comeback to several indexes.

 

[andi222]

Could you please break down your valuation for each operating business and the valuation method you have used?

It looks like we are then miles apart reagrding valuation and I want to understand how you get to your conclusion.

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[SoleTrader]

If only it was zero, there would be hope.  Its substantially less than zero.  I had a look at the true value of the operating businesses, less the debt burden i still get a value less than zero.  Jooste messed up properly, with no recourse?

Agreed on the books NAV is zero. However if you look at the true value of the operating units there is still a lot of value left. We have mentioned in previous posts why management has impaired everything basically to zero.

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[MrGermanGuy]

https://www.ifre.com...bers-b1402c4w7r

 

nice 

[andi222]

Agreed on the books NAV is zero. However if you look at the true value of the operating units there is still a lot of value left. We have mentioned in previous posts why management has impaired everything basically to zero.

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[SoleTrader]

Technically the company remains insolvent. Litigation isn't the main issue, it's the fact that the NAV is less than zero. I am short the share for what that's worth

[andi222]

I dont think they will still sort out the litigations this year. Rather 2020 or latest 2021.

One positive SENS regarding litigations can bring the change and then the share will fly.

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[andi222]

I dont think they will still sort out the litigations this year. Rather 2020 or latest 2021.

One positive SENS regarding litigations can bring the change and then the share will fly.

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[MrGermanGuy]

Pepkor already flying a bit

here is everyone waiting for the settlement 

[MrGermanGuy]

Market is buying the rumor that TILP will find an end sooner than later.....

[MrGermanGuy]

Sorry in German
 

 

 

 

https://www.ariva.de...69#jump26782634

offical

 

tilp is checking the offer, 

 

 

court date (18th December) postponed

 

[DayTraderDad]

Hi LarryK,

 

so normally the market cap and volumes traded are the important factors for the placement into Indexes. 

 

Steinhoffs share price should be at around 14 Rand to be placed back in to the JSE top 40.

For it to be in the S-Dax it needs to be around 2 rand and MDax at around 20 rands. 

 

So currently we are far off these amounts but as I mentioned before if the plan of management works out these levels are achievable. 

 

Revenue wise/EBITDA wise etc Steinhoff is easily placable under Top 40 if not even top 20 on the JSE.

 

For me we are back to the level before  the jump which was a classic short squeeze. Ideal buying opportunity.

[andi222]

Andi, just for interest sake, do you know where snh is currently ranked on the jse?

 

Hi LarryK,

 

so normally the market cap and volumes traded are the important factors for the placement into Indexes. 

 

Steinhoffs share price should be at around 14 Rand to be placed back in to the JSE top 40.

For it to be in the S-Dax it needs to be around 2 rand and MDax at around 20 rands. 

 

So currently we are far off these amounts but as I mentioned before if the plan of management works out these levels are achievable. 

 

Revenue wise/EBITDA wise etc Steinhoff is easily placable under Top 40 if not even top 20 on the JSE.