Debt-laden Steinhoff International (SNHJ.J) said on Thursday it had raised 4.9 billion rand ($277 million) by selling 265 million shares, or 7.2%, of discount retail subsidiary Pepkor Holdings (PPHJ.J).
Steinhoff shares dropped 13.64% at the market open. Pepkor shares dipped 1.02%.
Following the sale via an accelerated book building process, Steinhoff’s interest in Pepkor, owner of South African clothing brands PEP and Ackermans, will reduce to about 43.8% from 51%.
“Proceeds from the placing will in due course be used to de-leverage Steinhoff’s capital structure,” the retail holding company, which also has operations in Europe, the United States and Australia, said.
The company added it continued to view Pepkor as a strategic investment for the group.
Pepkor has been doing well recently, with shoppers trading down to cheaper brands as high inflation squeezes spending.
teinhoff has been looking to reduce its group services debt of 10 billion euros ($10.7 billion) through asset sales and listings following a 2017 accounting scandal that prompted about 90 separate legal claims against it.
Last month Steinhoff, which has a primary listing in Frankfurt , raised 315.2 million euros from selling a 6.6% stake in its European retail group Pepco (PCOP.WA).
