Steinhoff's South African entity could write off all the loans that were made to the group’s European operations and still carry on, an executive of a wholly owned Steinhoff company told a Competition Tribunal hearing yesterday.
“It is strong, and in the stable are Pepkor and Steinhoff Africa Retail, or Star, which is listed. There is a big investment in KAP, and then they own motors and property.
“The South African entity is in great shape, and all of Steinhoff’s South African businesses are profitable,” said Neil Kotze, a divisional finance executive at Unitrans Automotive.
However, Kotze admitted the events at Steinhoff International were placing the group’s South African business in jeopardy despite the local entity having sufficient cash.
Kotze said whatever happened with Steinhoff International’s European operations would definitely spill over to South Africa, although Steinhoff’s South African business was ring-fenced to a certain extent.
He said the SA Reserve Bank would have to approve cash from Steinhoff International’s South African entity leaving the country to rescue the overseas business.
Kotze was speaking at a tribunal hearing to consider the acquisition by Unitrans Automotive of Action Ford.
Kotze said it was “business as usual” for Unitrans Automotive, which, as a motor dealer, was given approval to continue with the acquisition.
“We were given cash to purchase Action Ford, and we are on the acquisition trail to have enough dealerships, especially Ford franchises, so we can have a standalone business unit with Ford.
“We would like the tribunal to approve this acquisition. We have enough capital to pay for it and carry on,” he said.
Action Ford has five Ford dealerships in Krugersdorp and Roodepoort in Gauteng, Zeerust and Lichtenburg in North West, and Citrusdal in the Western Cape.
Kotze said Action Ford “did a bit of a Steinhoff” and ran out of cash.
“They can’t expand and started producing losses in the past three months because they can’t buy enough stock, or whatever.
“The whole idea is for us to come to the rescue and basically maintain it and expand our Ford footprint,” he said.
In response to a request from Enver Daniels, the chairperson of the panel hearing the case, Unitrans Automotive agreed to a condition that it would not embark on any retrenchments at Action Ford for two years.
The Competition Commission had recommended the unconditional approval of the transaction.
Zanele Hadebe, appearing for the commission, said the proposed transaction did not raise any public interest concerns.
Hadebe said the commission contacted all the relevant trade unions and none of them had raised any concerns about jobs.
The tribunal had not announced its decision on the proposed transaction by late yesterday.