EOH to sell R1bn of non-core businesses; blacklists 50 companies
By Loni Prinsloo
(Bloomberg) – EOH plans to sell a further R1bn ($68m) of non-core businesses in 2020 as it reorganises and reduces debt.
EOH will structure operations into three units and sell assets that don't fit with the revised set up, the Johannesburg-based company's chief executive officer, Stephen van Coller, said by phone. The firm has already sold 15 assets generating about R750m, he said.
"We managed to strike a new deal with the banks last week, where 75% of sales goes to the banks and the other 25% will be used to grow the business," said Van Coller. "Two years from now, the business will have gross debt of less than R1.5bn."
Van Coller, a former vice president of MTN and head of Absa's investment-banking unit, was named CEO in July last year, tasked with EOH's turnaround after allegations of mismanagement. Microsoft Corp. canceled a contract with EOH in February following anonymous complaints. EOH has blacklisted 50 companies from doing business with it after an investigation into previous corrupt dealings.
EOH dropped 1.8% in Johannesburg as of 9:32am. The stock has plunged 59% this year.