Van Paste in race against the clock to restructure EOH

EOH Holdings CEO Stephen van Coller is in a race against the clock to restructure the information technology sector in South Africa before shareholders and lenders lack patience.

Van Coller, a former leader of the Barclays Africa Group and the MTN Group, has been asked to turn things around and improve his company's reputation after allegations of government contract corruption. He plans to divide the Johannesburg-based EOH into several parts in order to further value a portfolio of more than 270 companies, while appointing PwC as the internal auditor and launching a whistleblowing application.

"The EOH is like a vegetable soup, where it's not clear if it's 10% carrots or 90% carrots," the CEO said in an interview in Johannesburg. "We are working to solve this problem, and part of that work will be to split it into different units with separate advice to improve the capital structure."

Van Coller has some work to do. EOH shares plummeted last week when Microsoft formed ties with the company that, according to TechCentral, would have intervened after receiving allegations from a whistleblower regarding a contract with the Ministry of Finance. Defense. The stock plunged 45% this year, making it the worst performance of South Africa's benchmark.

EOH plans to separate the utility sector from the private sector and focus it on short-term contracts. The software could be divided into six to eight separate companies, said Van Coller, adding that badignments or listings would then be taken into account. If a lender was impatient during the process, the sale of a business could be accelerated, according to the CEO.

Ready to support

Lebashe Financial Services, a shareholder who last year injected 1 billion rand in EOH to acquire a stake, is ready to support Van Coller's strategy, said Lebashe's chief investment officer Warren Wheatley in a response. questions by e-mail.

"We have a subscription agreement authorizing us to acquire 250 million euros worth of additional shares," he said. "We will buy additional shares in the market if the market continues to undervalue the business."

Lebashe was behind President Asher Bohbot's decision to withdraw this week, Wheatley added. "We asked for a refresh of the painting." – Reported by Loni Prinsloo and John Bowker, (c) 2019 Bloomberg LP