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Steinhoff seeking US$1.4bn investment through part-sale in African business

South African retailer Steinhoff International has announced its plans to sell 23.3% of its African unit, Steinhoff Africa Retail Ltd (STAR), on the Johannesburg stock market this month.

STAR’s target market is the country’s lower income consumers, able to make a profit by sourcing low cost products and distributing them through its retail brands, selling furniture and households goods amongst other products.

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The stock will be sold in a private listing, with as many as 800mn shares being sold at between R18 and R23 each, with the aim of raising the R18.4bn (US1.4bn) at the top end of this.

“The listing will be accompanied by a capital raising through a private placement in order to establish the public shareholding spread and liquidity required by the JSE,” said STAR.

If successful, the deal will mark the most expensive sale of stock by any South African company in two years since Naspers Ltd. raised $2.5bn worth of shares through the sale of its TV and internet business back in 2015.

The listing comes in the wake of the company’s planned announcement to buy a 22.7% stake in South African food retailer Shoprite Holdings Ltd., with this planned announcement coming seven months after the breakdown in merger talks between the two companies.