Poundland fixed crucial loan

Reuters

Poundland has secured a key investment to reduce its dependence on scandal-hit father, South Africa Steinhoff.

Pepkor Europe, which owns Poundland in Europe, said he had received £180m loan from US investment firm Davidson Kempner.

The loan will replace investment in Pepkor Europe should be granted by the owner Steinhoff, to help with the expansion plans.

Steinhoff is under investigation by German authorities for an estimated $7 billion (£5.3 bn) accounting scandal.’Trust’

Like Poundland, the loan will help to support the UK furniture brands Benson for Beds and Harveys, which are also owned by Pepkor.

Pepkor Europe chief executive Andy Bond said the money meant that the division was no longer dependent on financial support from Steinhoff.

He said all Pepkor’s brands were “independent, viable, [and] the delivery of positive cash flows”.

“Because of this force, despite the ongoing challenges faced by our parent company, we were able to work quickly during the Christmas holidays to enable new sources of funding that will allow us to reassure suppliers, to implement our investment plans, and to ensure the future of these successful companies,” he added.

Poundland has reported on Wednesday that sales grew 5.6% in the 12 weeks to 24 December.

Director Barry Williams said the discount retailer is “significantly higher than the growth of the market [and] to enter the new year with great confidence.”

Benson

Stuart Machin, the group chief executive for Harveys and Benson for Beds, also called Pepkor loan means that the two brands could face the year with confidence”.

“The Harveys, Benson for Beds and our production, the companies have always been run independently and for the British customers,” he added.Management shake-up

Steinhoff has seen its share price fall almost 90% from the beginning of December, when news of the accounting scandal emerged.

The conglomerate has admitted to accounting irregularities in the distant 2015, and has made major changes to its management team in an attempt to calm investors.

The group owns 40 local brands in more than 30 countries.

As well as Poundland, Benson for Beds and Harveys in the UK, its brands include Conforama in Europe, Pep and Ackermans in South Africa and Snooze in Australia.

Steinhoff derives about 60% of its earnings from Europe and 34% from Africa.

But the rating agency Moody’s warned last week that Steinhoff may not have sufficient funds to sustain its operations in europe”.