November 19, 2018 / 11:28 AM / 22 days ago

Steinhoff promotes commercial director to CEO, shares leap

JOHANNESBURG (Reuters) - Steinhoff has appointed commercial director Louis du Preez, a key figure in its attempts to recover from a financial crisis, as its permanent chief executive, sending shares in the South African retailer as much as 15 percent higher on Monday.

Du Preez will replace acting CEO Danie van der Merwe, who will step down at the end of December, a year after the retailer revealed a multibillion-dollar hole in its finances.

“It is not too surprising who they have gone for given his role in driving the restructuring and this would be seen as a positive,” said Mark Hodgson, equities trader at Avoir Capital Markets.

At 1355 GMT, Steinhoff’s shares were up 8.7 percent at 1.99 rand, after earlier trading a higher as 2.14 rand.

Du Preez joined the Steinhoff group in mid-2017 and was nominated as commercial director and member of the management board on Dec. 19. He has jointly led negotiations in the restructuring of the group, the retailer said.

Steinhoff’s former permanent CEO Markus Jooste, who resigned after the scandal broke, is being investigated by South African authorities over the crisis that wiped more than 90 percent off the company’s market value and forced it to sell assets.

Creditors agreed in July to hold off on their debt claims for three years, throwing the company a lifeline and giving it three months to start restructuring its debt.

Steinhoff in October asked creditors for a one-month extension while it negotiates documents required for the restructuring.

“He is the ideal candidate to lead the company through the final stages of the restructuring and into the next phase of its development,” Chairperson Heather Sonn said of du Preez.

Steinhoff also said it planned to launch a so-called company voluntary arrangement (CVA) in relation to its Steinhoff Europe AG (SEAG) business, another step in restructuring the subsidiary’s debts.

The SEAG business includes home furnishings chain Conforama, Pepco and variety store chain Poundland among others.

Steinhoff said in a separate statement that the CVA process was not expected to have any impact on any of its operating businesses, landlords or trade creditors.

It added that it had also launched “consent solicitations” with bondholders to restructure bonds due in 2021, 2022 and 2023 for another subsidiary, Steinhoff Finance Holding GmbH.

Additional reporting by Patricia Aruo; Editing by James Macharia, Mark Potter and David Evans

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