JOHANNESBURG, March 18 (Reuters) - South African furniture group Steinhoff offered to increase its holding of debt-laden subsidiary JD Group to 98 percent to rescue the household retailer from “challenges” in the consumer market and credit market.
Steinhoff, which currently owns 56.8 percent of the ailing JD Group, said it would provide quick and much-needed financial support to the company, which is saddled with bad debt because of cash-strapped consumers failing to make payments.
“JD Group is facing many challenges in the furniture retail and consumer finance business segments. These challenges will take some time and additional capital to overcome,” said Steinhoff.
In February, JD Group reported heavy losses and nearly doubled the money set aside to cover customers’ unpaid debts.
Shares of JD Group surged 28.4 percent to 28.21 rand, while Steinhoff rose 1 percent to 53.45 rand. (Reporting by Zandi Shabalala; Editing by Ed Cropley)