{"id":556817,"date":"2024-08-23T12:58:23","date_gmt":"2024-08-23T10:58:23","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=556817"},"modified":"2024-08-23T12:58:29","modified_gmt":"2024-08-23T10:58:29","slug":"eohs-future","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/business\/556817-eohs-future.html","title":{"rendered":"EOH’s future"},"content":{"rendered":"\n

After losing its entire top management twice, and much of its board, EOH has a leadership team in place who can rebuild the once-great South African technology company.<\/p>\n\n\n\n

To understand what EOH’s future might look like, it is necessary to go back six years \u2014\u00a0when Stephen van Coller became CEO on 1 September 2018.<\/p>\n\n\n\n

EOH’s share price was on a downward trend, trading at R40 per share, well below its highs of over R100 two years earlier.<\/p>\n\n\n\n

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

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

Van Coller tackled corruption and poor corporate governance and focused on reducing debt.<\/p>\n\n\n\n

However, to pay back EOH’s loans, he sold many of the company’s best-performing business units, including Sybrin, Construction Computer Software, and LSD Information Technology.<\/p>\n\n\n\n

The company’s former management team was criticised for selling its most valuable subsidiaries at a fraction of their market value, destroying its revenue-generating capabilities.<\/p>\n\n\n\n

The company’s financials have supported these accusations, as its assets have declined much faster than its liabilities.<\/p>\n\n\n\n

The decline in equity is due to losses from selling the assets at lower than book value prices.<\/p>\n\n\n\n

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

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

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

However, EOH 2.0 failed to meet expectations, and shareholders experienced significant wealth destruction.<\/p>\n\n\n\n

\"\"
Stephen van Coller, former EOH CEO<\/figcaption><\/figure>\n\n\n\n

Management exodus<\/h2>\n\n\n\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\n\n\n

This made the theoretical breakeven price for the share after the rights offer was completed R2.20.<\/p>\n\n\n\n

In February 2024, a year after the rights offer, the EOH share price declined to R1.05 per share.<\/p>\n\n\n\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\n\n\n

At the same time, Van Coller and EOH CFO Megan Pydigadu had tendered their resignations.<\/p>\n\n\n\n

Pydigadu’s last day was 31 October 2023, and Van Coller’s 31 March 2024.<\/p>\n\n\n\n

However, it quickly emerged that they had no succession plan in place, and their departure left a leadership vacuum.<\/p>\n\n\n\n

EOH appointed chairman Andrew Mthembu as interim CEO.<\/p>\n\n\n\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\n\n\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\n\n\n

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

New board, new management<\/h2>\n\n\n\n

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

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

The EOH board appointed Marius de la Rey, the current chief executive officer of the company’s largest segment, iOCO South Africa, as interim CEO.<\/p>\n\n\n\n

It also appointed Marialet Greeff as CFO, but she resigned after four months on the job<\/a>.<\/p>\n\n\n\n

Greeff was the last remnant of EOH’s top executives, meaning her departure signals the second complete change to the exco team.<\/p>\n\n\n\n

On 19 July, a month after Greef’s departure, EOH announced the appointment of Ashona Kooblall as executive director and group chief financial officer.<\/p>\n\n\n\n

Kooblall is also from iOCO. She joined EOH in 2020 as the finance director of iOCO SA and became the chief financial officer of iOCO in January 2024.<\/p>\n\n\n\n

EOH now has a new board and executive management in place who will hopefully be able to turn the company around.<\/p>\n\n\n\n

MyBroadband contacted EOH for comment on what the market can expect from the company, but it did not respond by publication.<\/p>\n","protected":false},"excerpt":{"rendered":"

After years of turmoil, EOH’s new leadership has an opportunity to rebuild the once-great South African technology company.<\/p>\n","protected":false},"author":15,"featured_media":469825,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[19],"tags":[1149,96774,6428,61146,43922,90100,34261,55940,37913],"class_list":["post-556817","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-andrew-mthembu","tag-ashona-kooblall","tag-eoh","tag-ioco","tag-jabu-moleketi","tag-marialet-greeff","tag-marius-de-la-rey","tag-megan-pydigadu","tag-stephen-van-coller"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/556817"}],"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\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=556817"}],"version-history":[{"count":4,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/556817\/revisions"}],"predecessor-version":[{"id":556911,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/556817\/revisions\/556911"}],"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=556817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=556817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=556817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}