JSE-listed technology group EOH is slowly winning its battle over its debt burden.
The group has agreed to a R1.6 billion deleverage plan with its lenders.
The troubled company, which is primarily focusing on reducing its debt, informed investors on Tuesday that it had achieved its first capital repayment milestone having repaid R540 million of the R1.6 billion.
“This is in excess of the R500 million agreed with lenders and well ahead of the 31 August 2020 deadline.”
Since 1 August 2018, EOH said it has repaid R1.77 billion to its lenders – R1,140 million in the capital and R626 million in interest.
The company added that it continues to service its interest obligations to lenders and paid R75 million of interest during May. “Going forward, the group will benefit from the drop in base interest rates of 2,5% with all the group’s interest costs being at floating rates linked to JIBAR.”
The company attributed the repayments to improved financial performance for the quarter combined with the recent sale of the remaining 30% stake in Construction Computer Software.
In April, EOH announced it was looking to deleverage its R2.9 billion debt burden in the next 18 months.
Disposal of non-core assets on track
The company is also on track to dispose of its non-core assets, part of its plans to deleverage its balance sheet.
Since 1 February 2019, EOH has signed agreements for the disposal of non-core assets in excess of R1.4 billion (including extinguished liabilities), receiving a total of R865 million in cash to date.
The sale of Dental Information Systems Holdings signed for R250 million has been approved by the Competition Commission without any conditions and is now before the Competition Tribunal awaiting approval.
“The sales processes for two of the IP assets are ongoing and are in the final stages with bidders,” the company said.
“Additionally, the sales process for the third IP asset was launched in May 2020, with significant interest received from various bidders.”
Furthermore, EOH said it recently completed a detailed strategic review of its IOCO businesses, which have been co-created and built from the bottom up.
“EOH management remain invigorated and excited about the scale of the opportunity and the offering that EOH presents in the digitisation journey of customers and the country as a whole,” the company said.
“This scale has been evidenced in the over 70 products that have been marketed to EOH customers to specifically assist them in Solving their COVID-19 business challenges.”
Also read: Is EOH Slowly Evolving to be Renamed iOCO?