Poundland owner Steinhoff has been rocked by another downgrade by credit ratings agency Moody’s amid fears the conglomerate may struggle to “sustain its European operations”.

Moody’s has slashed ratings across the group to CAA1, making it a very high credit risk.

The rating, which has been applied to parent company Steinhoff International as well as subsidiaries Steinhoff Investment Holdings and Steinhoff Europe, is the 17th of 21 possible levels, barely above default.

The savage downgrade comes weeks after Steinhoff was forced to postpone its financial results after uncovering “irregularities” in its accounts.

The South African conglomerate, which also owns Harveys and Bensons for Beds in the UK, has seen around 90% of its value wiped out following the revelations.

Chief executive Markus Jooste quit in the aftermath and issued a statement apologising to shareholders, while chairman Christo Wiese – Steinhoff’s largest shareholder – has also stepped down.

Retail Week revealed last week that credit cover for Harveys and Bensons for Beds had been cut in the wake of the scandal.


Earlier this month, Moody’s slashed Steinhoff’s investment-grade rating and warned of possible further downgrades.

Those have now materialised after Moody’s deemed Steinhoff’s debts to be poor quality and high-risk.

The agency said: “Liquidity levels could prove insufficient to sustain its European operations in the near term if it is unable to shore up its cash balances or other sources of liquidity.”

Moody’s added: “The situation has been compounded by its operating companies placing an additional liquidity burden on Steinhoff’s centralised treasury function to fund their working capital needs.”

Steinhoff had net debt of €6.48bn at its latest half-year results and has said that it may need to raise €2bn, with €1.47bn of debt due to mature next year.

Moody’s said the ongoing investigations into alleged accounting irregularities could “make it challenging to either repay or refinance these debt maturities”.