EOH says its debt reduction strategy is on track
EOH is struggling with a debt burden some four times its market capitalisation and says it is making progress in paying down its debts.
The technology group said it had already paid R540m of the R1.6bn it has agreed to repay by the end of February 2021, which is in excess of the R500m target, and ahead of a target date of the end of August.
Its share price has fallen almost 90% over the past two years. The group has been battling with corporate governance issues, with a ENSafrica probe in 2019 of previous technology contracts with the state revealing a number of irregularities and suspicious transactions.
The group had debt of R2.99bn up to the end of its six months to end-January, well in excess of its R583m market capitalisation on Tuesday morning. The group has been selling off assets to reduce debt.
The group has agreed to reduce debt by R1.6bn by the end of February 2021.
EOH said it should benefit from falling interest rates, which will help with interest payments, while it had managed to beat its debt reduction target due to an improved financial performance in its first quarter to end-April.
It has recently completed its sale of its remaining 30% stake in Construction Computer Software, for about R143m.
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