Former EOH chief executive Asher Bohbot will be returning to the company he founded. Photo: Simphiwe Mbokazi/African News Agency/ANA
JOHANNESBURG - Listed business technology services group EOH announced yesterday that it would embark on a R3.2billion black economic empowerment deal with Lebashe Investment Group.

EOH said it wanted to establish a long-term strategic partnership with Lebashe, a BEE group that specialises in financial services.

“The strategic alignment of Lebashe and EOH’s interests through the transaction presents an opportunity for the parties to further co-operate and pursue growth opportunities and synergies between the business interests of the parties, which shall be accelerated through an upfront equity capital injection by Lebashe into EOH and further supported by the provision of a new funding facility by Lebashe to EOH.”

Under the terms of the deal, Lebashe will subscribe for new ordinary EOH shares for R250million and EOH will have access to a funding facility for growth in an amount of up to an additional R3bn.

EOH said the deal would significantly enhancing its BEE ownership credentials over a period of 10 years, at a minimum of 20.3percent for five years.

Lebashe, which is run by Tshepo Mahloele, former deputy minister of finance Jabu Moleketi and Warren Wheatley, has interests in Capitec, 4 Africa Exchange and Aluwani Capital, among other investments. Lebashe said at the end of November that its asset position stood in excess of R3.5bn.

EOH also announced the overhaul of its business into two independent units that would have their own brand and identity, growth strategy and business model.

The company said one of the businesses would continue to trade under the EOH brand name, and the second, called NewCo for now, would be launched within the following two months.

EOH said the key characteristics of the businesses would be new generation digital technologies and cross-selling opportunity with existing customers.

It said the “NewCo” brand would be a high degree of specialisation in each of its businesses and growth-driven equally by acquisitions and organically.

Backbone

“Approximately 55percent of EOH’s group revenue is currently generated by this business,” EOH said.

“Approximately 45percent of EOH’s group revenue is currently generated by NewCo’s business. This strategy will form the backbone of a new phase in EOH’s growth and development.”

The group also announced that its founder and erstwhile chief executive, Asher Bohbot, has been appointed as non-executive chairperson with immediate effect, replacing Sandile Zungu.

Bohbot returned to the group he founded on a full-time role focusing on strategy and stakeholder management in December last year. Other changes include Grathel Motau, who leaves her role as a non-executive director. Tebogo Maenetja was appointed as an executive director.

EOH shares rose 0.96percent on the JSE yesterday to close at R73.70.

- BUSINESS REPORT