EOH, along with Steinhoff, became the poster child for corporate corruption and got hammered as a result.<\/p>\n\n\n\n
The share price continued its downward slide as investors did not know how deep the corruption went and whether the company would recover.<\/p>\n\n\n\n
Another challenge Van Coller focussed on during his tenure as EOH chief executive was reducing debt.<\/p>\n\n\n\n
When he took the hot seat, the company had R4.5 billion in loan debt and R2.51 billion in cash and cash equivalents. Therefore, EOH had enough cash to cover 55% of its R4.54 billion debt.<\/p>\n\n\n\n
EOH also had R5.3 billion in trade debtors. This represents the money customers still owed EOH for delivered products and services.<\/p>\n\n\n\n
The company’s auditors described its debtor accounts that were not past due as being of good credit quality and not expected to default.<\/p>\n\n\n\n
Only R1.5 billion in the debtor accounts represented past-due debtors primarily from public enterprises.<\/p>\n\n\n\n
Simply put, the combination of EOH’s cash and trade debtors account had enough money to cover EOH’s loan account.<\/p>\n\n\n\n
However, Van Coller opted to sell many of EOH’s biggest revenue-generating assets to reduce debt and pay the banks their money.<\/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
A summary of the businesses sold, and what EOH achieved<\/h2>\n\n\n\n
During EOH’s asset disposal programme to reduce debt, the company sold many of its best businesses.<\/p>\n\n\n\n
Through its asset disposals, the company generated around R2 billion in cash, which it used to pay off debt.<\/p>\n\n\n\n
The deals also included R156 million in debt relief and R30 million in dividend withholdings, as shown in the table below.<\/p>\n\n\n\n EOH’s asset disposal programme came at a significant cost to the company, making it a shadow of its former glory.<\/p>\n\n\n\n During this period of business disposal, EOH decreased its interest-bearing loans by R3.11 billion from R4.5 billion to R1.43 billion.<\/p>\n\n\n\n Considering the significant reduction in net assets and revenue, it is debatable whether it was the right strategy.<\/p>\n\n\n\n The chart below shows the net effect of EOH’s asset disposals during Van Coller’s term as chief executive.<\/p>\n\n\n\n Despite the significant asset disposals, EOH did not generate enough money to pay off all of its interest-bearing debt.<\/p>\n\n\n\n When it no longer had assets to sell and faced technical insolvency, EOH turned to its shareholders.<\/p>\n\n\n\n It launched a rights offer to raise R500 million to pay off the result of the debt and ensured the banks got their money.<\/p>\n\n\n\n Investors were promised significant growth following the rights offer under the EOH 2.0 banner. However, it never materialised.<\/p>\n\n\n\n The EOH share price continued to decline, and the battered shareholders continued to lose money.<\/p>\n\n\n\n The finances also did not improve. Today, EOH generates around R6 billion in revenue, a fraction of its former R16 billion.<\/p>\n\n\n\n The company’s market cap is around R1.2 billion, compared to R6 billion when EOH started its asset disposal programme.<\/p>\n\n\n\n Debt has also started to creep up again. At the end of the 2023 financial year, EOH reported total loan debts of R838.5 million.<\/p>\n\n\n\n Only six months later, for the H1 2024 period, EOH reported that this figure had already increased back to R960.1 million.<\/p>\n\n\n\n To address the challenges, EOH announced a new board and management. Many investors hope the new team will turn the company around.<\/p>\n\n\n\n To date, investors have given the team a vote of confidence. The share price increased by around 50% since the new board and chief executive was announced.<\/p>\n","protected":false},"excerpt":{"rendered":" Between 2018 and 2023, EOH sold many of its prime assets. Here is a look at how much they got for these assets and the impact on the company.<\/p>\n","protected":false},"author":341111,"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_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[57364],"tags":[6428,37913],"class_list":["post-559229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-enterprise","tag-eoh","tag-stephen-van-coller"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/559229"}],"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\/341111"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=559229"}],"version-history":[{"count":2,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/559229\/revisions"}],"predecessor-version":[{"id":559515,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/559229\/revisions\/559515"}],"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=559229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=559229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=559229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Company sold<\/strong><\/td> Cash <\/strong><\/td> Debt Relief<\/strong><\/td> Dividend<\/strong><\/td><\/tr> Construction Computer Software<\/td> R587.40<\/td> –<\/td> –<\/td><\/tr> Data World Group<\/td> R40.00<\/td> R60.00<\/td> –<\/td><\/tr> Dental Information Systems<\/td> R250.00<\/td> –<\/td> –<\/td><\/tr> LSD Information Technology<\/td> –<\/td> R96.00<\/td> R30.00<\/td><\/tr> MARS Holdings<\/td> R211.00<\/td> –<\/td> –<\/td><\/tr> Sybrin and Sybrin Systems<\/td> R334.35<\/td> –<\/td> –<\/td><\/tr> <\/td> <\/td> <\/td> <\/td><\/tr> Hoonar Tewurks Consulting (HTC)<\/td> <\/td> <\/td> <\/td><\/tr> Managed Integrity Evaluation (MIE)<\/td> <\/td> <\/td> <\/td><\/tr> Xpert Decision Systems<\/td> <\/td> <\/td> <\/td><\/tr> Zenaptix<\/td> <\/td> <\/td> <\/td><\/tr> HTC, MIE, Xpert, and Zenaptix<\/td> <\/strong>R422.00<\/td> –<\/strong><\/td> –<\/strong><\/td><\/tr> <\/td> <\/td> <\/td> <\/td><\/tr> EOH Network Solutions (EOH NS)<\/td> <\/td> <\/td> <\/td><\/tr> Hymax<\/td> <\/td> <\/td> <\/td><\/tr> EOH NS and Hymax<\/td> R144.90<\/td> –<\/td> –<\/td><\/tr> Total<\/strong><\/td> R1,989.65<\/strong><\/td> R156.00<\/strong><\/td> R30.00<\/strong><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n \n
![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/09\/1-3.jpg\")
<\/figure>\n\n\n\n