The Ibex era begins: Steinhoff’s quest for redemption?

From a billion-dollar giant to R80 million in the bank, Steinhoff’s epic fall came to a landing thud – delisting from both the Frankfurt and the Johannesburg bourses.

However, this will not bring the Steinhoff story to an end.

As a last-ditch effort, Steinhoff’s leadership obtained approval to execute a bold manoeuvre: the transfer of its assets, liabilities, and contracts to a newly established holding company named Ibex.

ALSO READ: Steinhoff finally scratched off the markets this week

Rebirth

Much like its predecessor, Steinhoff, Ibex is South Africa-managed and tax-paying, but finds its legal domicile in the Netherlands.

The present CEO of Steinhoff, Louis Du Preez, and the Chief Executive Officer of the group, Theodore de Klerk, have assumed roles within Ibex, currently serving as the company’s sole board members.

This strategic change, involving the transfer of assets and the delisting, hopes to save the company from a long and disorganised liquidation process.

In return for this change, Steinhoff’s lenders have agreed to push back the due date for the company’s huge debt. The debt was originally supposed to be paid off by June 2023, but now they have more time until 2026.

Collapse of an empire

The scale of Steinhoff’s decline is stark. Once a multibillion-rand powerhouse boasting a market capitalisation exceeding R200 billion, its current valuation stands at only R80 million. The blame for this colossal downfall is widely attributed to Markus Jooste, the former CEO.

A brief history

Steinhoff’s story began in 1964 when company founder Bruno Steinhoff established the brand in Westerstede, Germany. Over the decades, the company embarked on a remarkable growth journey, culminating in the acquisition of numerous smaller furniture companies, including a significant 35% stake in South Africa’s Gommagomma around 1997.

ALSO READ: German arrest warrant issued for former Steinhoff CEO

However, between 2017 and 2019, Steinhoff was embroiled in a major scandal. Company managers were suspected of participating in accounting fraud, involving the inflation of revenues at company subsidiaries and a lack of proper financial information disclosure, which potentially misled investors and authorities. This scandal ranked among the most significant accounting debacles of its era.

Following Steinhoff’s delisting and the rise of Ibex, the company’s future remains uncertain, with investors, regulators, and the public closely monitoring this unique transition in the retail and finance sector.