Steinhoff just a shell as it delists today

When Steinhoff delists from the Johannesburg Securities Exchange (JSE), the company – which once had a market capitalisation of over $10.5bn – will be worth only as much as the luxury Western Cape beach house of its disgraced ex-CEO Markus Jooste, reports Fin24. At the height of its success in 2016, the furniture and household group's shares were trading at $5. Before trade in the group's stock was suspended last week, its equities were changing hands at between one and two cents. On its last day of trade the whole company could be snapped up for a measly $4.2m. The Reserve Bank attached the mansion in Voëlklip, Hermanus, a year ago. Jooste is accused of having contravened foreign exchange regulations. Not that anyone would want to buy it. Steinhoff was already emptied of its assets months ago, leaving a shell on the JSE running down the clock until it was delisted. Its leadership had already said that shareholders wouldn't get paid out when its shares stop trading today after 25 years on the local bourse. Following its delisting the company is set to be liquidated. But the delisting, which will also see the company exit the Frankfurt Stock Exchange, will not bring the Steinhoff story to an end. Months ago, Steinhoff’s leadership was given the nod to transfer its assets, liabilities and contracts to a new holding company called Ibex. The asset transfer and delisting are part of a plan to save the group from a messy and drawn-out liquidation. In return, Steinhoff's creditors agreed to extend the maturity (repayment) date of Steinhoff's €10.2bn debt burden from June 2023 to 2026.

Like Steinhoff, Ibex is managed from SA where it pays tax, but is domiciled in the Netherlands. Steinhoff CEO Louis du Preez and the group's Ceo, Theodore de Klerk, are staying on AT Ibex. The two are also Ibex’s sole board members at the moment. What Ibex won't have, however, is operational control over the group's remaining assets. Following Jooste’s abrupt resignation in late 2017, Steinhoff's top leadership focused their energy on saving the company from an acute liquidity crisis, lawsuits and a ballooning debt burden. Those Steinhoff subsidiaries that were not sold off were left to manage themselves. Under Ibex, this division of labour is to continue. JSE-listed Pepkor and Pepco, which trades on the Warsaw bourse, will continue to be run independently from the parent company, says Steinhoff. So will the US-based Mattress Firm, which is in the process of being sold. So what will Du Preez and De Klerk do? Their job appears to mainly cover handling the messy fallout from the Steinhoff scandal, reports Fin24. The duo will continue to try to reduce the group's debt burden, which sits with Ibex, not the group’s subsidiary and associate companies. Du Preez and De Klerk will also oversee ongoing litigation, including a bid to claw back funds from Jooste and others. The group is also engaging with the Reserve Bank over billions in restricted and frozen funds. If Ibex sounds very similar to Steinhoff, there are some key differences. Unlike Steinhoff, Ibex is not a public company and is not owned by shareholders.