EOH Group CEO, Stephen van Coller, says the company is now able to place maximum focus on its growth, efficiency and talent strategy after striking a settlement to legacy issues with the South Africa Revenue Service and Standard Bank.
EOH, through EOH Abantu trading as Highveld, has been involved in negotiations with SARS over a PAYE dispute which has now been resolved and settled.
The settlement reached between the two parties includes the payment of R112 million before 1 March 2024 to SARS. EOH said this amount was “in line with Abantu’s year-end provisions” and will therefore not have an effect on its income statement.
Abantu is also o forfeit its tax receivable credit of R6,9mn, an amount that was not provided for previously. The company said the forfeited tax receivable credit will “negatively affect”its income statement on the tax line.
Abantu will additionally forfeit its assessed loss of R34.5mn although this will not have an impact on the group income statement
“We are extremely excited to close out our last significant legacy issue. While this negotiation was frustrating at times from an EOH business perspective, I would like to assure South Africans that in solving this very technical and complex issue, the senior SARS officials were extremely diligent in ensuring the best possible outcome,” van Coller said.
EOH was now focusing on executing its growth, efficiency and talent strategy. Van Coller described the resolved legacy issue as the final piece of a very complicated puzzle that needed to be solved to allow the EOH Group to operate as a normal”business.
EOH has also struck an agreement with Standard Bank for a temporary increase in its facilities to enable the company to make its payments before the March 1 deadline.
“Due to successful sales of non-core assets the additional facility requirements are limited to R63 million. (An) agreement to waiving the loan covenants for a period of 12 months to allow additional loan repayments to reduce the EBITDA to total debt covenant ratio below the 2:1 requirement level,” EOH said.
BUSINESS REPORT