EOH makes first capital repayment milestone
CAPE TOWN – EOH Holdings made its first capital repayment milestone by repaying R540 million of the R1.6 billion, which was in excess of the R500m agreed with lenders, the group said in a market update.
EOH, which provides technology software and hardware services, is trying to reinvent itself after allegations of corruption in its past dealing with the government saw it close its EOH Mthombo business unit, and adopt a strategy at the end of last year, to reduce debt.
The payment was also well ahead of the August 31, 2020 deadline. The share price shot up 50.9 percent to R4.98 Tuesday Morning.
Since August last year, the group said it had repaid R1.77bn to its lenders – R1.14bn in capital and R626m in interest.
At the half-year results in August, a R1.6bn deleverage plan was agreed with lenders.
The first capital repayment milestone followed an improved performance by the group, combined with the recent sale of the remaining 30 percent in Construction Computer Software.
The group paid R75m in interest in May. Going forward, it would benefit from the drop in base interest rates of 2.5 percent, with all the group’s interest costs being at floating rates linked to JIBAR.
The group planned to deleverage primarily through the sale of non-core assets. Since February 1, 2019, non-core asset disposals in excess of R1.4bn were signed, resulting in R865m in cash being received.
The sale of Dental Information Systems Holdings for R250m announced in December, had been approved by the Competition Commission and was awaiting Competition Tribunal approval.