Lebashe Investment Group, EOH’s strategic partner since 2018, has signed irrevocable undertakings to follow its rights on the shares it currently owns, which represent 13,06% of the issued share capital, as well as invest further R100-million through a specific share issue.
This relates to EOH proceeding with an equity capital raise of up to R600-million. The net proceeds of the capital raise will enable the gpoup to restructure its balance sheet which will result in a fit for purpose capital structure allowing it to focus on its well-defined growth strategy.
“The combined investment is a clear vote of confidence in EOH’s future and strategy,” says Stephen van Coller, CEO of EOH, in a note to customers.
“I am thrilled by the trust that Lebashe continues to show in our board, management and our staff through this additional investment, and I would like to take this opportunity to thank them for their unwavering support over our challenging four year turnaround period.”
This follows Friday’s news that EOH has reached a settlement agreement with the Special Investigating Unit (SIU) and the Department of Water and Sanitation (DWS) regarding the SIU investigation on the procurement of, or contracting and implementation of four IT contracts that were awarded by the Department of Water and Sanitation (DWS) to EOH Mthombo to the value of R474-million.
“The SIU provided EOH with its investigation findings in March 2022, after which EOH provided evidence of the substantial work that was done for DWS, which resulted in the negotiation of an amount, which is deemed to be just, fair and equitable, to be reimbursed by EOH to the DWS,” Van Coller says.
EOH, the SIU and DWS have concluded an agreement regarding payment of a Settlement Amount by EOH to the DWS of an initial upfront payment of about R65-million, which relates to duplicated software licenses which will be refunded; and the remaining approximately R112-million to be paid over a period of 36 months commencing in January 2023.