Steinhoff International Holdings’s shares slumped 45% in Johannesburg on Friday after Moody’s Investors Service slashed the global furniture and clothing retailer’s credit rating by four notches to junk.

The drop extends losses from a seven-day rout in the stock to 90%, wiping R213 billion ($15.5 billion) off its market value. The yield on its 800 million euro ($914 million) bonds due January 2025 rose 17 basis points to yield 9.93%.

Moody’s cut the debt from one step above investment grade to three levels below on Thursday, placing it on review for further downgrades amid accounting irregularities that are preventing Steinhoff from publishing its latest earnings. The move comes as a South African regulator starts a probe, adding to a review by Johannesburg’s stock exchange and an investigation in Germany, where it is listed.

Shares in the owner of Conforama in France and Pep in Africa have plunged in the wake of an announcement late Tuesday that chief executive officer Markus Jooste quit and Steinhoff had appointed PwC to scrutinize the company’s accounts. The retailer has its roots in South Africa and has expanded aggressively around the world with a series of acquisitions, including Mattress Firm in the US and Poundland in the UK.

The credit downgrades reflect “the uncertainties and implications for the company’s liquidity and debt capital structure,” Moody’s said in a statement. “Given that allegations of accounting irregularities were raised and rebutted in August 2017 and again in November 2017, it calls into question the quality of oversight and governance at Steinhoff.”

Taking steps

Steinhoff said on Thursday that it’s considering boosting liquidity by selling assets worth at least 1 billion euros ($1.2 billion) and reviewing the recoverability of non-South African assets worth a further 6 billion euros. It confirmed that chief financial officer Ben La Grange remains in his position, saying there’s no evidence he was involved in matters being investigated. 

Steinhoff has scheduled a meeting with the lenders of two of its syndicated debt facilities, according to three people familiar with the matter.

The Pretoria-based Financial Services Board has started an independent probe into possible false and misleading financial reports, Finance Minister Malusi Gigaba said in an emailed statement on Thursday, adding that he supports the inquiry.

The Public Investment Corporation, Steinhoff’s second-largest shareholder and a manager of South African government-worker pension funds, said it’s awaiting information from investigations “by domestic and international regulators and/or law enforcement agencies” before making a decision on its investment. The PIC owns a 10% stake in Steinhoff, which is now worth $1.1 billion less than two days ago.

‘Serious concerns’

“Allegations of accounting irregularities by Steinhoff are serious concerns for PIC,” Deon Botha, head of corporate affairs for the money manager, said in an email. Gigaba said he’s “mindful” that many retirement and savings funds will be hurt by the loss in value and has asked the PIC to prepare a report on the extent of the exposure.

The retailer’s biggest shareholder is billionaire Chairman Christo Wiese, who has stepped in to take temporary charge of the company. He hasn’t yet responded to requests for comment.

“They are walking a tightrope at the moment,” said Jean Pierre Verster, a fund manager at Cape Town-based Fairtree Capital. The share decline “implies the market is giving them less and less benefit of the doubt that they will address the situation. So they can save their company, but time is of the essence.”

Investor confidence

Steinhoff, which employs about 130 000 people worldwide, announced Wednesday that it was indefinitely delaying the release of its results as new information had come to light on a criminal and tax investigation in Germany.

The retailer, which also has a base in Amsterdam, said in a statement Thursday that it had received expressions of interest in “certain non-core assets.” Steinhoff also said its African unit will formally commit to refinancing its long-term liabilities owed to the company, boosting liquidity further.

“The speed with which Steinhoff is able to release its annual accounts will be key to whether management can restore investor confidence,” London-based Bloomberg Intelligence analysts Shan Liu and Charles Allen wrote in a note.