{"id":539353,"date":"2024-06-03T08:00:42","date_gmt":"2024-06-03T06:00:42","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=539353"},"modified":"2024-06-03T08:07:44","modified_gmt":"2024-06-03T06:07:44","slug":"drama-at-eoh","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/enterprise\/539353-drama-at-eoh.html","title":{"rendered":"Drama at EOH"},"content":{"rendered":"

EOH has been in turmoil over the last year, losing its chief executive, chief financial officer, executive chairman, and many established board members.<\/p>\n

On Friday, EOH announced that Andrew Mthembu has resigned as a director and from his position as executive chairman and interim CEO.<\/p>\n

Fatima Newman has stepped down as an executive director but will remain in her capacity as EasyHQ chief executive.<\/p>\n

Another EOH board member, Bharti Harie, has resigned as an independent non-executive director.<\/p>\n

These resignations followed shareholders approaching EOH regarding the board’s succession plan.<\/p>\n

EOH has appointed Marius de la Rey as the company’s new executive chairman and interim CEO.<\/p>\n

De la Rey is the current chief executive officer of the company’s largest segment, iOCO South Africa.<\/p>\n

He was involved in EOH’s restructuring and has been on the company’s executive committee since 2019.<\/p>\n

Before joining EOH, De la Rey spent five years at Absa as CEO of distribution coverage and customer channels.<\/p>\n

He also spent five years at Standard Bank as head of group real estate and head of channel development.<\/p>\n

De la Rey said he is excited to be leading EOH through the next part of its journey.<\/p>\n

EOH has also appointed three new independent non-executive directors \u2014 Veronica Motloutsi, Dennis Venter, and Rhys Summerton.<\/p>\n

Motloutsi is the founder and CEO of SmartDigital Solutions, a company specialising in digital transformation.<\/p>\n

She serves as a non-executive director at Sentech and the deputy chairperson of the .za Domain Name Authority and VulaTel.<\/p>\n

Venter founded Quarry Cats and Atoll, which offered services to the construction and mining industries. He currently oversees a diversified investment portfolio.<\/p>\n

Summerton is the founder and investor at Milkwood Capital, a long-term, value-oriented, global investment company based in Windsor, United Kingdom.<\/p>\n

He is on the Nasdaq-listed Nexxen International board and the boards of other unlisted investment companies.<\/p>\n

Setting the scene<\/strong><\/h2>\n
\"\"<\/a>

Former EOH CEO Stephen van Coller<\/p><\/div>\n

To understand the drama at EOH, it is important to go back to 1 September 2018, when Stephen van Coller took the reins as CEO.<\/p>\n

At the time, the EOH share price was on a downward trend. It traded at R40 per share, well below its highs of over R100 two years earlier.<\/p>\n

Van Coller’s mandate was creating value by growing EOH and creating jobs. Shareholders were tired of losing money.<\/p>\n

However, a group of former directors and executives said banks had parachuted in Van Coller, a former banker, to ensure they got back the money EOH owed them.<\/p>\n

The company was under pressure because of its growing debt burden, reports of corruption and mismanagement, and poor corporate governance.<\/p>\n

Van Coller took aim at corruption and poor corporate governance at EOH and focused on reducing debt.<\/p>\n

He sold many of EOH’s business units, including Sybrin, CCS, and LSD, and used this money to repay the banks.<\/p>\n

EOH also raised R600 million through a R500 million rights issue and a R100 million BBBEE deal in early 2023.<\/p>\n

The proceeds of the February 2023 capital raise were used to settle the majority of EOH’s senior bridge facility.<\/p>\n

The banks received their money through EOH selling businesses and the rights issue, and EOH’s debt was significantly reduced.<\/p>\n

Van Coller said he was very proud that EOH never missed an interest payment and that the banks got all their money.<\/p>\n

He added that the successful rights issue welcomes a new era for EOH, knowing that their strategy for EOH 2.0 has the backing of all their shareholders and lenders.<\/p>\n

Shareholders, who saw over 90% of their wealth disappear since Van Coller took the reins, were ready to see the growth Van Coller promised.<\/p>\n

EOH 2.0 is not delivering, and the management team left<\/strong><\/h2>\n
\"\"<\/a>

Former EOH CFO Megan Pydigadu<\/p><\/div>\n

When the rights offer was announced, EOH traded at R4.28 per share. Shareholders were offered 227 additional shares for every 100 held for R1.30 per share.<\/p>\n

At the first announcement of the rights offer, the theoretical breakeven price for the share after the rights offer was completed would be R2.20.<\/p>\n

In February 2024, a year after the rights offer, the EOH share price declined to R1.05 per share. The EOH 2.0 promises did not come to fruition.<\/p>\n

EOH’s loss for the six months through January 2024 widened by over 1,600%. The company’s loss per share deepened from 3 cents to 15 cents.<\/p>\n

The company’s problems went beyond its financials. Van Coller and EOH CFO Megan Pydigadu resigned and left the company.<\/p>\n

Van Coller, with Pydigadu as his right-hand woman, ran a tight ship. Their departure left a leadership vacuum.<\/p>\n

No clear succession plan was in place, so EOH appointed its chairman, Andrew Mthembu, as interim CEO.<\/p>\n

However, this did not work out as expected, and EOH’s shareholders grew impatient. They wanted to start seeing the promised returns.<\/p>\n

On 10 May 2024, EOH announced that it “had been approached by certain shareholders regarding the succession plan for the EOH board”.<\/p>\n

It said that it was engaging further with the shareholders and that it would make an announcement soon.<\/p>\n

That announcement came on 31 May 2024, when EOH announced sweeping changes to the board.<\/p>\n

It also replaced Mthembu as interim chief executive and chairman and announced that Jabu Moleketi was the new chairman.<\/p>\n

EOH is still looking for a permanent chief executive officer.<\/p>\n","protected":false},"excerpt":{"rendered":"

EOH’s executive chairman and interim CEO is gone, and two other board members resigned. It announced four new board members, including a new acting CEO and executive chairman.<\/p>\n","protected":false},"author":23,"featured_media":469825,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57364],"tags":[1149,59781,6428,35,55940,37913,42042],"class_list":["post-539353","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-enterprise","tag-andrew-mthembu","tag-ccs","tag-eoh","tag-headline","tag-megan-pydigadu","tag-stephen-van-coller","tag-sybrin"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/539353"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=539353"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/539353\/revisions"}],"predecessor-version":[{"id":539361,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/539353\/revisions\/539361"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/469825"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=539353"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=539353"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=539353"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}