Steinhoff raising funds

The other big news on the local front is that Steinhoff have announced that they are issuing shares to a number of parties in order to raise a whole lot of money, in order to shore up cash reserves. The logistics are easy enough to understand, just lean in a little closer to understand the different legs. Firstly, Upington Investment Holdings (a business controlled by the trust of Christo Wiese, who is the biggest shareholder of Steinhoff) will subscribe for 162 million new shares at 5.055 Euros per share (higher than where the stock price traded yesterday). Total proceeds of that, 819 million Euros. Next up, an empowerment deal for 60 million shares with a vehicle called Lancaster 101, facilitated by The Public Investment Corporation (the PIC). That will raise 303 million Euros, same price of 5.055 Euros per share, I am sure there will be more detail in due course.

Next, an "upsize facility" (you thought that was only available at McDonald's, right?) of 110 million shares offered to institutional shareholders via an accelerated bookbuild, price determined via the process. More details on that during the next day or so, I guess. In addition to the 162 million shares that Upington is paying for, the same vehicle is buying another 152 million shares currently classified by the company as Treasury shares (the ones that the company holds). In total, should the full placement of the "upsize facility" take place, the company may raise up to 2.447 billion Euros. Wow. That represents, as part of the closing value last evening, 12.5 percent of the market capitalisation. This is pretty big for the company, and again a sign that Christo Wiese continues to back this team in a significant way. The stock is up over two and a half percent at the get go, the stock has certainly been under the pump lately too!