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Investec's exposure to Steinhoff share price could be up to 3% of group profits

Investec Group unit Investec Bank Ltd. has derivative exposures linked to Steinhoff International Holdings NV's share price, which could have a potential impact of up to 3% to the group's posttax operating profit, it said.

The bank also holds Steinhoff convertible bonds equivalent to less than 0.3% of the group's consolidated Tier 1 capital.

Further, Investec Group's associate investment, the IEP Group, did not have any exposure to Steinhoff. Markus Jooste, CEO of Steinhoff, and a director on IEP Group's board, resigned Dec. 5, Investec said.

Meanwhile, Steinhoff postponed a meeting with investors to Dec. 19 from Dec. 11, citing the fact that it had not yet published its full-year earnings, Bloomberg News reported.

The furnishing and clothing group's total exposure to banks and other creditors was around €18 billion as at end-March, with short- and long-term liabilities worth €5.9 billion and €12.1 billion, respectively, the newswire reported.

Also problematic is the use of 628 million Steinhoff shares as collateral by Chairman Christoffel Weise's investment vehicles for loans from Citigroup Inc., HSBC Holdings Plc, Goldman Sachs Group Inc. and Nomura Holdings Inc. These shares are now valued at €365 million, compared to a value of €2.2 billion in November, the newswire reported.

Other banks with exposure to the Frankfurt-listed company include Standard Bank Ltd., BNP Paribas SA and Bank of America Corp. At the same time, FirstRand Ltd. unit Rand Merchant Bank said a review of its exposures to Steinhoff and entities owned by Weise showed that they were "adequately secured," according to the report.

Steinhoff said it had received "expressions of interest" in certain noncore assets that would release a minimum of €1 billion of liquidity. Further, its unit, Steinhoff Africa Retail Ltd, has committed to refinancing its long-term liabilities due to the company, which would free up another roughly €2 billion.