Steinhoff news and subtleties

All,

There was a news item the other day that went largely unnoticed: Pepkor Europe is to be renamed Pepco Group.

If there were any doubts about how concretely IPO preparations are being pursued, this should give some comfort. The alignment of brand names in the corporate structure and dropping the limiting Europe from the name show clear ambitions of floating the company in the foreseeable future.

Other news:

- SIHL have delayed publication of its accounts. The delay is not supposed to have any impact on the consolidated accounts of the NV. More likely the delay has to do with the preference shares it has issued and the litigation faced by its parent, the NV, as well as its subsidiary, SIHPL. Bonds have not really moved and shouldn’t have.

- The company has called for an EGM in November to appoint a new auditor. We think Steinhoff should have managed to attract a bigger name.

- The CDS auction was unspectacular and triggers a mere 16% pay-out.

We are pondering if its worth owning some of the bonds into that event.

Wolfgang