South Africa

Equity investors initially responded positively this week to Steinhoff International’s fresh attempts to shore up its operations, helping the dual-listed retail company's share price rebound, before it dropped again on Thursday amid talk of possible legal action and calls for the board to resign.

South Africa’s distressed Steinhoff has moved its meeting with lenders from Monday to next Tuesday, following its revelation on accounting irregularities last week.

Steinhoff International’s revelation of accounting irregularities has smashed the reputation of a company that had been widely admired as a daring and astute user of capital markets. Sam Kerr, Virginia Furness, Aidan Gregory, Silas Brown and Bianca Boorer examine how the retailer's troubles have rocked confidence among bond, equity and loan investors and even shaken appetite for South African risk.

Investors may be quick to pass off Steinhoff’s collapse as an idiosyncratic corporate event, but the fall of one of South Africa’s biggest companies is a severe blow to a country struggling to cling on to its image.

South African property investment company Growthpoint postponed a euro denominated five year note on Wednesday suggesting that even high quality credits from the country will struggle to do deals as investors turn increasingly negative on it.

Equity investors have turned on what was once a darling retail stock in a dramatic two day sell-off which has rocked the company and South Africa to its core.

The shocking fall from grace this week of Steinhoff International, the South African retail group, is causing pain for many in the equity-linked debt market, where it has issued €2.7bn of bonds. The potentially unsound nature of its earnings caused an 80% collapse in its share price this week, and has triggered a fast transfer of its convertibles into specialist hands.

South Africa’s second largest private hospital operator Life Healthcare group has signed a £350m syndicated loan to refinance its acquisition of UK-based Alliance Medical group last year.

Steinhoff International, the global retail conglomerate and one of South Africa’s largest companies, has seen its share price collapse in a historic sell-off, which onlookers say is unprecedented for South African equities.

No deal had appeared from Growthpoint, the Johannesburg listed property company, by lunchtime on Wednesday with two investors telling GlobalCapital that the issuer was struggling to drum up enough demand. The leads later sent out a note to say that the deal had been postponed.

South Africa based Growthpoint is talking a new euro-denominated bond at mid to high 2% yield, following investor meetings last week.

Johannesburg-listed real estate investment trust Growthpoint will next week test whether investor appetite for South African debt has been negatively affected by the series of ratings actions on the country last weekend.