March 20, 2018 / 8:49 AM / 4 months ago

UPDATE 1-Steinhoff says considering all options to cut debt

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JOHANNESBURG, March 20 (Reuters) - Crisis-hit South African retailer Steinhoff said on Tuesday it is considering “all of its options” in order to support its liquidity after a report on Monday that the retailer could sell a stake in its African unit.

Steinhoff, which has more than 40 retail brands that include Conforama, Poundland and Mattress Firm, faced a fight for survival after admitting “accounting irregularities” in December, wiping about 85 percent off its market value and throwing it into a liquidity crisis.

The sale of shares in Steinhoff Africa Retail (STAR) , in which Steinhoff owns a 77 percent stake, would come through an accelerated bookbuild, Bloomberg reported, quoting unnamed sources familiar with the matter.

Shares in STAR weakened 3.5 percent in early trade before trimming losses to trade 2.97 percent down at 21.25 rand. Steinhoff’s shares were down 1.80 percent to 3.82 rand.

“During the recent trading update, the group stated that it continues to take steps to refinance or redeem the debt financing within the South African operations,” Steinhoff International said in an emailed response to questions.

“Subsequently the group disposed of a 17 percent interest in KAP Industrial Holdings and the group is considering all of its options.”

The company has said it plans to raise around 2 billion euros ($3 billion) from the sale of non-core assets and the proceeds of debt repayments from STAR to plug a hole in its balance sheet.

Last week Steinhoff raised 3.66 billion rand ($304.89 million) from its KAP stake sale.

Steinhoff spun off its African chains by separately listing STAR to get a higher rating for its developed market businesses. The spin-off was also to give investors keen on exposure to Africa a chance to invest in STAR directly. ($1 = 0.8102 euros) ($1 = 12.0045 rand) (Reporting by Nqobile Dludla Editing by James Macharia)

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