JOHANNESBURG – KAP Industrial Holdings, which is 43% owned by Steinhoff International, is distancing itself from the scandal-hit retailer by scrapping two business deals with the group.
An agreement to share corporate-services including legal and investor relations end s on 1 March and there’s an agreement to co-rent office space that will run until March 31, said Stellenbosch based KAP in a results presentation on Tuesday.
KAP currently has no outstanding loans either to or from Steinhoff and is independently managed, controlled and funded, said the company.
KAP, a supplier of industrial products, is looking to avoid contagion from the crisis surrounding Steinhoff, which has plunged almost 90% in value since announcing accounting irregularities. KAP’s shares slumped 6.8% on the first trading day after the wrongdoing was uncovered and closed 3.6% higher by the close in Johannesburg on Tuesday.
“It’s been a sad process to watch,” said Gary Chaplin, chief executive officer.
KAP has been hiring Steinhoff staff to work in its new separate corporate services unit, said Chaplin. The company is going to rent different office space in Stellenbosch where Steinhoff has its South African headquarters.
On Monday, the company said a series of acquisitions and expansion projects would fuel growth in 2018 after net income increased by 14% in the six months through December. Steinhoff has been a shareholder in KAP since 2005.
Photo Credit- Jacaranda Fm