South African IT Services Firm EOH Plans Further 1B Rand in Asset Sales

(Bloomberg) -- EOH Holdings Ltd. plans to sell a further 1 billion rand ($68 million) of non-core businesses in 2020 as it reorganizes and reduces debt.

EOH, an IT services and solutions provider, 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 750 million rand, 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 1.5 billion rand.”

Van Coller, a former vice president of MTN Group Ltd. and head of Absa Group Ltd.’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.