Stephen van Coller. Picture: TREVOR SAMSON
Stephen van Coller. Picture: TREVOR SAMSON

EOH CEO Stephen van Coller is in a race against the clock to restructure the sprawling SA IT business before shareholders and lenders run out of patience.

Van Coller, a former executive at Barclays Africa and MTN, was brought in to turn around the troubled business and improve its corporate reputation after allegations of corruption linked to government contracts. He plans to break Johannesburg-based EOH into different parts to release greater value from a portfolio of more than 270 companies, while appointing PwC as an internal auditor and launching a whistle-blower app.

“EOH is like a vegetable soup, where it’s not clear if it’s 10% carrots or 90% carrots,” the CEO said. “We’re working toward fixing this, and part of that will be to split it into different units with separate boards to get the capital structure right.”

Van Coller has his work cut out. EOH shares went into free fall last week when Microsoft cut ties with the company which, according to TechCentral website, came after receiving allegations from a whistleblower about a contract with the ministry of defence. The stock has plunged 45% this year, making it the worst performer on SA’s benchmark index.

EOH plans to separate the public-sector services business from the private-sector arm, and focus it on shorter-term contracts. The software side could be split into about six to eight separate companies, Van Coller said, adding that disposals or listings will then be considered.

Should any lender become impatient during the process, the sale of a business could be fast-tracked, according to the CEO.

EOH shares finished almost 4.5% higher at R17.76 on Friday, valuing the company at just over R3bn.

Lebashe Financial Services, a shareholder that last year injected R1bn into EOH for an equity stake, is willing to support Van Coller’s strategy, Lebashe CIO Warren Wheatley said.

“We have a subscription agreement that gives us the right to acquire another R250m in shares,” he said. “We will buy additional shares from the market if the market continues to undervalue the business.”

Lebashe was behind chairman and founder Asher Bohbot’s decision to stand down this week, Wheatley said. “We did call for a refresh of the board.”