The European arm of Steinhoff International has borrowed up to £180 million of financing to reduce its reliance on the South African retail group.
Pepkor Europe, which operates Poundland, Dealz and Pep&Co, has secured the loan from a US hedge fund in a bid to distance itself from Steinhoff's financial issues, according to the Financial Times.
Andy Bond, the chief executive of Pepkor Europe, said that in spite of Steinhoff's difficulties, its business operations "are all independently profitable, delivering positive cash flows."
Steinhoff CEO Markus Jooste resigned last month in the wake of accounting irregularities that could stretch back a number of years.
The group, which owns a number of food, clothing and furniture chains, delayed the publication of its 2017 figures, saying that it would need to restate financial results going as far back as 2015.
Last week, Moody’s Investors Service cut Steinhoff’s rating deeper into junk, saying the company may struggle to refinance or repay some of its debt.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.