Investec aims to dampen fears over exposure to ailing Steinhoff

Discounted: Investec has exposure to South African giant Steinhoff

Stefan Wermuth/Reuters

Michael Bow11 December 2017

London-listed bank Investec tried to put a lid on fears about its exposure to crisis-hit Poundland owner Steinhoff on Monday after the shares fell last week.

The Anglo-African group, dual listed in London and Johannesburg, has exposure to Steinhoff’s share price, down 85% from last week, through derivatives.

It faces a loss of up to 3% of post-tax profits in trading losses.

However, it was not expecting to suffer any losses on its credit exposure to Steinhoff.

The conglomerate, which bought Poundland last September, is in crisis after chief executive Markus Jooste resigned and it revealed accounting problems. Its credit rating has been slashed to junk.

Steinhoff has hired Moelis and Alix Partners to help untangle its ties to the banking sector as other lenders assess their exposure to the crisis.

Citigroup, HSBC and Nomura have lent 1.5 billion to Steinhoff chairman Christo Wiese in return for 628 million Steinhoff shares, Bloomberg reported.