15225 replies to this topic

[Dusty Mountain]

I took a punt average buy in R1.67,  based on the "blood on the streets = time to be greedy" and the fact that there are some very good businesses within Steinhoff holdings that are very profitable.

 

Agree some major restructuring required, perhaps selling off of more assets that are marginal or pose a capital risk going forward, to reduce debt considerably... as well as some restructured existing debt.

 

I doubt a capital raise is the answer as the sentiment atm is negative and wait and see...

 

If I was in charge, and being an optimist, there is a business case to take forward. Besides the good businesses involved/ major shareholders incl government PIC, high number of employees = liquidation is not an option.

 

Let the recovery begin, patience is key and hopefully some good news coming from the lenders meeting soon.

 

 

 

 

[Investment novice]

So here is another thought....the company is owned by shareholders and debt holders....the legal suits by shareholders invariably impacts shareholders...the very ones filing the law suit...and ultimately against other shareholders.....shareholders are ultimately liable to settle other shareholders. Surely as shareholders we can request the court to consider this and ensure that the liability falls on the executive board amd related entities....this conundrum by itself will delay judgement....and will reduce the penalty imposed on shareholders..veb clearly articulated that they would go after all involved and not only steinhoff.......dont be afraid of the court cases...
These will be settled at significantly less than is claimed and after a long contestation.....the most important information that is required is an understanding on business operational succes growth and cashflow......in the short term......long term....hopefully no more debt....and cockroaches...

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[Investment novice]

5 law suits....3.5 billion dollars....3 years to settle.....with equity and dividends....
Restucturing strategy will differ for parties....an immediate addition 1 billion dollars loan repayment from star can alleviate loans due this year and next in europe.
Sale of another 5% star can assist working capital but steinhoff does not want to do so indicating that less diastorus restructuring options available..
8 days to meeting with lenders and 6 weeks to trading update...to knowif we ending up qith a company that will be no more.....
Final question...board believes survival is possible.....they have not filed for bancruptcy protection.....its now a waiting game....blood in the streets ...warren i now understand andhave experienced this....sitting tight...hoping and praying my years of experience in business and behavioural economics pays off. Or i would have learnt an expensive financial lesson....

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[Procrastinator]

So GT Ferreira is looking for 100m euro and Other parties 120m Euro according to Fin 24.
Wowsers.
IN, hope this goes your way.

[Investment novice]

Charles Allen, a retail analyst at Bloomberg Intelligence, said by phone. “If they can show they have businesses with decent cash flows and balanced sheets, then they may well be able to get banks backing.”

This is the billion dollar question......the remainder of todays news is old news...

Snh announcement demobstratesthat the company has been focussed on this and the june update will be testament...management has come to the fore here..

Regarding law suits...wiese is out the window....weekened negotiation....and the remainding law suits perhaps another 3 billion euro worth....and will be contested
Over the next 3 years..perhaps 1 years dividends gone....

Again...i am biased..and have bought 15000 more shares today..and with more liquidity will buy more....

[Investment novice]

Right on the mark........management with gloves on and getting on with it...

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[Investment novice]

Latest news on Mr Wiese freeing his time to battle Steinhoff. I hope that he is true to the remarks in the interview- where he potentially will be a welcomed guest to the restructuring talks and assists in the turnaround. He is unlikely to recoup the R59b but could protect his remaining shares invested through the upington company in the shareholder register- some 6%. Not sure if he has been accumulating more shares with a different entity.

 

Steinhoff meets the lenders in a weeks time- what should we expect from these engagements.

 

1. unlikely to agree any way forward as forensic audit still outstanding-

2. SNH needs to report on agreement on debt waivers and further time to ensure debt covenants not breeched

3. SNH to report back to market on the interim WACC impact for 2018

4. IF SNH can provide h1 trading update interim ahead of the june deadline- this will be fantastic- there is no reason why this target cannot be achieved.

5. SNH to confirm what percentage of the 7 billion assets have been verified. relating to property valuation. SNH also to confirm that the process for the Austrian share transfer was legitimate and the bodies that signed off on this

6. Lastly - SNH to advise on outcomes of talks and the various proposals for consideration

 

 

The market is hungry for direction not only for information on the forensic investigation

 

 

 

 

[Investment novice]

Another scenario to consider is a rights issue, given all the debt SNH has.

could they do a rights issue at an inflated price compared to current trading prices say r12 hypothetically and limit recipients of the issue to all  debt holders. this would be a negotiated amount???

this sounds difficult with current information holes....but definitely could be share allocation without a value per share agreed or a sliding scale or something more concrete.....

Wiese mentioned listing the property portfolio and related rental streams- perhaps this could also be allocated to debt holders.

shareholders and legal claimants will all be managed at a later stage as the quantum of the claim is reduced with  recovery- and of course these things may take 3 to 4 years to work through.....

[Shi]

Another scenario to consider is a rights issue, given all the debt SNH has.

[Investment novice]

There is also the other option the big boys can take... and that's to increase their initial investment in an effort to lower their average share. 

Below you is a simple example working on what Polly said eg 1 mil shares @ R80... R14 mil can get their average share price down to R11.75 

 

price per share amount of shares value of investment average share price     80 1000000 80000000 80     2 1000000 2000000 2               Total extra invested investment status 2000000 82000000 41   2000000             price per share amount of shares value of investment average share price     41 2000000 82000000 41     2 2000000 4000000 2               Total extra invested investment status 4000000 86000000 21,5   6000000             price per share amount of shares value of investment average share price     21,5 4000000 86000000 21,5     2 4000000 8000000 2               Total extra invested investment status 8000000 94000000 11,75   14000000             price per share amount of shares value of investment average share price     11,75 8000000 94000000 11,75     2 8000000 16000000 2               Total extra invested investment status 16000000 110000000 6,875   30000000             price per share amount of shares value of investment average share price     6,875 16000000 110000000 6,875     2 16000000 32000000 2               Total extra invested investment status 32000000 142000000 4,4375   62000000             price per share amount of shares value of investment average share price     4,4375 32000000 142000000 4,4375     2 32000000 64000000 2   Total extra invested           126000000 investment status 64000000 206000000 3,21875    

 

This is still an incredibly high-risk option. But this does mean they do not write off R80 mil... 

 

All of this is still under the assumption that Mr. Alan Grey has the same view as @Investment Novice, meaning they believe the share price could/should be around R20 as share if restructuring occurs. This would also mean that they could recover all of their losses suffered since Dec.

 

Like I said this would be a very unlikely move... but then what's another R16 mil for one of the big boys, considering the possible reward(and not writing off R80 mil).

 

Any thoughts? 

Ram - if you hold the belief that SNH is heading for bankruptcy you exit all your holdings and don't aim to dilute the share price as an additional R20m to the R60m or R80 m means an additional R20m in the hole. and you would have to justify to your investors that hold you accountable why you made the investment and through even if just a pittance.....

However if you of the belief that there is a likelyhood of recovery - a percentage of recovery,.....then you aim to lower your average cost of investment below the potential recovery amount to make a profit, break even or limit overall loss.

can there be some recovery? billion rand question?

[Ram85]

Apologies for the gibberish in the middle of my previous post.

My excel grab look correct in the post editor... but when I posted it, it looked terrible. see attached

 

 

But essentially it shows if Alan Grey purchases an additional R14 mil shares @ R2 their average share price should be down to R11.75 

Attached Files

•  2018-05-09 10_28_16-Book1 - Excel.jpg   69.44KB   10 downloads

Edited by Ram85, 09 May 2018 - 10:54 AM.

[Ram85]

IN let me use arbitrary figures by way of an example how the big boys play this..

 

Assume AG has 1000000 shares in at R80.00    = R80000000 invested before the crash

now trading at R2.00

 

Pays them to take a big risk

 

Buy another 1000000 @R2.00                           = R2000000

 

they probably wrote off the R80m....whats another R2m  to reduce risk even it that R2m goes to zero. They just of the opinion that the R2m is good risk reward...Not investing because they see it as a recovery...

 

There is also the other option the big boys can take... and that's to increase their initial investment in an effort to lower their average share. 

Below you is a simple example working on what Polly said eg 1 mil shares @ R80... R14 mil can get their average share price down to R11.75 

 

price per share amount of shares value of investment average share price     80 1000000 80000000 80     2 1000000 2000000 2               Total extra invested investment status 2000000 82000000 41   2000000             price per share amount of shares value of investment average share price     41 2000000 82000000 41     2 2000000 4000000 2               Total extra invested investment status 4000000 86000000 21,5   6000000             price per share amount of shares value of investment average share price     21,5 4000000 86000000 21,5     2 4000000 8000000 2               Total extra invested investment status 8000000 94000000 11,75   14000000             price per share amount of shares value of investment average share price     11,75 8000000 94000000 11,75     2 8000000 16000000 2               Total extra invested investment status 16000000 110000000 6,875   30000000             price per share amount of shares value of investment average share price     6,875 16000000 110000000 6,875     2 16000000 32000000 2               Total extra invested investment status 32000000 142000000 4,4375   62000000             price per share amount of shares value of investment average share price     4,4375 32000000 142000000 4,4375     2 32000000 64000000 2   Total extra invested           126000000 investment status 64000000 206000000 3,21875    

 

This is still an incredibly high-risk option. But this does mean they do not write off R80 mil... 

 

All of this is still under the assumption that Mr. Alan Grey has the same view as @Investment Novice, meaning they believe the share price could/should be around R20 as share if restructuring occurs. This would also mean that they could recover all of their losses suffered since Dec.

 

Like I said this would be a very unlikely move... but then what's another R16 mil for one of the big boys, considering the possible reward(and not writing off R80 mil).

 

Any thoughts? 

[Investment novice]

They done it for quite a few investments if my memory serves me correctly....Supergroup comes to mind and that made them good money after it recovered. But lost on some donkey ones...Abil?? Aeg??

AG made money on all where they were confident based on their analysis. AG are successful because they get into a businesses operations, understand strategy and cashflow- not only look at financials and forecasts. I work in a top 40 listed company of which AG have a large chunk, and have increased their investment- having an AGH shareholder comes with lots of admin and face time. apart from understanding risk, one of their investment requirements is business sustainability? I am not at all assuming that they love SNH in that case they would have bought up 15%. but they have a position which if anyone has information on- please share.

also with the current fiasco they would not be able to justify a massive investment- this is more than a hedge or a gamble-

does anyone have any recent reputable analyst positions. SNH is still a hold

[Investment novice]

They done it for quite a few investments if my memory serves me correctly....Supergroup comes to mind and that made them good money after it recovered. But lost on some donkey ones...Abil?? Aeg??

AG made money on all where they were confident based on their analysis. AG are successful because they get into a businesses operations, understand strategy and cashflow- not only look at financials and forecasts. I work in a top 40 listed company of which AG have a large chunk, and have increased their investment- having an AGH shareholder comes with lots of admin and face time. apart from understanding risk, one of their investment requirements is business sustainability? I am not at all assuming that they love SNH in that case they would have bought up 15%. but they have a position which if anyone has information on- please share.

also with the current fiasco they would not be able to justify a massive investment- this is more than a hedge or a gamble-

does anyone have any recent reputable analyst positions. SNH is still a hold

[Polly]

that's a plausible scenario- however they have governance and investment controls. not AG money but investors funds and therefore cannot gamble R1 even- even if a sure thing if not backed by an analysis and sound reasoning that can be defended

They done it for quite a few investments if my memory serves me correctly....Supergroup comes to mind and that made them good money after it recovered. But lost on some donkey ones...Abil?? Aeg??

Edited by Polly, 09 May 2018 - 10:08 AM.

[Investment novice]

IN let me use arbitrary figures by way of an example how the big boys play this..

 

Assume AG has 1000000 shares in at R80.00    = R80000000 invested before the crash

now trading at R2.00

 

Pays them to take a big risk

 

Buy another 1000000 @R2.00                           = R2000000

 

they probably wrote off the R80m....whats another R2m  to reduce risk even it that R2m goes to zero. They just of the opinion that the R2m is good risk reward...Not investing because they see it as a recovery...

that's a plausible scenario- however they have governance and investment controls. not AG money but investors funds and therefore cannot gamble R1 even- even if a sure thing if not backed by an analysis and sound reasoning that can be defended

[Polly]

a lekkah afternoon braai also requires charcoal and fire.

 

time will tell....

 

"Steinhoff accounting boggles the mind....."

this is an interesting piece of journalism that points to the accounting irregularity of revaluation of shares that was previously valued at cost. the journalism finds some obscure ..or rather lets be kind....lets known investment analyst to comment on the validity of the transaction. why not seek the best in the industry to give you guidance. what does the head of Allan Gray investments think of this. The reality is that this massive transaction will be evaluated and repriced at maybe a lesser value but not zero and surely not R20billion.

this is legitimate corporate practice and had to be signed off by the board , Christo wiese; anumber of legal and banking experts; the FSB , JSEl Frankfurt etc.

is the entire world gullible...surely only the sheep that do not question the integrity of the information whether a beleaguered past shareholder or any current reader.

 

all I ask for is balanced informative journalism to give solice to past shareholders....sure I want to make a killing here too...lets get the truth, lets interrogate the information and if the truth is worse and burns Steinhoff then that's important too. but if there is more to meet the eye and the only objective is to sink the price so that the cannibals can get in cheap now...well then its important for us to also jump on the band wagon...let not your investment decisions be based on ignorance of lack of knowledge or fear...sure we don't know the facts---lets find out and interrogate and when we have more information at least we can then start to invest wisely....I am still waiting on more confirmation on the shareholder register...interestingly Citibank had been a buyer of debt were you aware and they now a buyer of shares...why would they play both sides of the fence...??could it be that they would support debt restructuring and settle on the revised terms, interest rates, equity and increased share valuation subsequently.....I a mere romantic dreaming about castles in the sky

 

IN let me use arbitrary figures by way of an example how the big boys play this..

 

Assume AG has 1000000 shares in at R80.00    = R80000000 invested before the crash

now trading at R2.00

 

Pays them to take a big risk

 

Buy another 1000000 @R2.00                           = R2000000

 

they probably wrote off the R80m....whats another R2m  to reduce risk even it that R2m goes to zero. They just of the opinion that the R2m is good risk reward...Not investing because they see it as a recovery...

[Investment novice]

Burn, burn, burned...

 

a lekkah afternoon braai also requires charcoal and fire.

 

time will tell....

 

"Steinhoff accounting boggles the mind....."

this is an interesting piece of journalism that points to the accounting irregularity of revaluation of shares that was previously valued at cost. the journalism finds some obscure ..or rather lets be kind....lets known investment analyst to comment on the validity of the transaction. why not seek the best in the industry to give you guidance. what does the head of Allan Gray investments think of this. The reality is that this massive transaction will be evaluated and repriced at maybe a lesser value but not zero and surely not R20billion.

this is legitimate corporate practice and had to be signed off by the board , Christo wiese; anumber of legal and banking experts; the FSB , JSEl Frankfurt etc.

is the entire world gullible...surely only the sheep that do not question the integrity of the information whether a beleaguered past shareholder or any current reader.

 

all I ask for is balanced informative journalism to give solice to past shareholders....sure I want to make a killing here too...lets get the truth, lets interrogate the information and if the truth is worse and burns Steinhoff then that's important too. but if there is more to meet the eye and the only objective is to sink the price so that the cannibals can get in cheap now...well then its important for us to also jump on the band wagon...let not your investment decisions be based on ignorance of lack of knowledge or fear...sure we don't know the facts---lets find out and interrogate and when we have more information at least we can then start to invest wisely....I am still waiting on more confirmation on the shareholder register...interestingly Citibank had been a buyer of debt were you aware and they now a buyer of shares...why would they play both sides of the fence...??could it be that they would support debt restructuring and settle on the revised terms, interest rates, equity and increased share valuation subsequently.....I a mere romantic dreaming about castles in the sky

[Snippit]

Burn, burn, burned...

 

[Investment novice]

Hehehheheh.

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