* Sets aside money to cover exposure to Steinhoff
* Cancels H1 dividend
* Posts 12 rise in H1 profit (Adds 500 million rand provision, updates shares)
By Tanisha Heiberg
JOHANNESBURG, May 29 (Reuters) - Steinhoff’s African unit scrapped its half-year dividend payout on Tuesday and set aside $40 million to cover its exposure to a share price slump at its crisis-hit parent.
Steinhoff Africa Retail (STAR)told investors it was now financially independent of Steinhoff and would put aside a total of 500 million rand ($40 million)to cover third-party debt, which had used its parent’s shares as collateral.
Shares in STAR, which runs Africa’s biggest apparel discount chain Pep, fell 4.4 percent to 16.16 rand however, bringing losses since early December to more than 40 percent.
Steinhoff uncovered holes in its books last December that have sent shares in both companies tumbling and sparked panic about the credibility of STAR’s own accounts.
“It is understandably difficult for the market to comprehend what the impact of events at Steinhoff is or can be on STAR,” the company said in a statement.
“(But) STAR is a separately listed company, and after the recent refinancing of shareholder funding, is financially independent.”
Steinhoff is fighting for survival after discovering accounting irregularities in December, wiping more than $15 billion, or more than 90 percent, off its market value
Steinhoff, which owns Poundland in Britain, Mattress Firm in the United States and Conforama in France, spun off STAR in August last year to get a higher rating for its developed market businesses and to give investors keen on exposure to Africa a chance to invest in STAR directly.
STAR reported a 12 percent rise to 53 cents in headline earnings per share in the six months ended March, thanks to a strong showing at its apparel division and a turnaround of its furniture unit.
Headline EPS is the main profit measure in South Africa that strips out certain one-off items.
The company also revised down its targeted 350 net store openings for the 2018 financial year to 330 as it slows expansion elsewhere in Africa, where low commodity prices have hit consumer spending. ($1 = 12.6574 rand) (Additional reporting by Tiisetso Motsoeneng Editing by Susan Fenton and Alexandra Hudson)