Graft-hit EOH weighs sale after profit

EOH Holdings chief executive Stephen van Coller is considering a sale of the graft-tainted South African IT firm after returning the group to profitability, according to sources.

The former Absa Group and MTN Group executive is seeking advice on how to price the company, said the sources, who asked not to be identified as the plan isn’t public. No final decisions have been made, and options other than a disposal could still be considered, they said.

“We are exploring all opportunities to maximise value for shareholders,” Van Coller said in a statement.

“Now that we are turning a profit this has opened up many opportunities for shareholders.”

The deliberations come almost four years after the Van Coller was appointed to try and turn around Johannesburg-based EOH, which later emerged to have been previously involved in a series of government-related corruption scandals that came to light after Microsoft Corporation severed ties in early 2019.

The turbulence has put pressure on the stock, which has tumbled 86% since 2018, valuing EOH at R952 million.

That’s even after reporting a return to positive earnings per share in the six months through January.

Van Coller has overseen a mass departure of executives, including the founders, and the company said last year it would look to sue former directors for more than R6 billion.

EOH has also sold more than 80 entities over the past 30 months, reducing gross debt from R4.1 billion to R1.65 billion, Van Coller said this week. A further R500 million is expected to flow into company coffers over the next six months from disposals, he said.

The meagre market valuation of the company is pushing Van Coller and the board to look at options including the potential sale, said the people.

The CEO may see the company perform better as a private entity, they said.

Shareholders “need to guide the board as to what they want us to do in the next growth phase”, Van Coller said.