TC|Daily | Stephen van Coller on what's really happening at EOH

EOH Holdings is about to embark on a rights offer, seeking up to R600-million from its long-suffering shareholders as it moves to deal with the unsustainable debt on its balance sheet.<br /> At the same time, the share price – R3.10 at the time of publication – has fallen to levels last seen in early 2020, soon after the start of the Covid-19 hard lockdown sent equity markets crashing.<br /> Is it all bad news at EOH, or is the market overreacting?<br /> Stephen van Coller, EOH’s group CEO, joins TechCentral’s Duncan McLeod in the TC|Daily studio to unpack the debt problem EOH faces: how bad is it, how much is it spending to service this debt, and what happens if the rights issue is not a success?<br /> Van Coller, who joined EOH from MTN Group, says getting the capital structure right will put the IT services group on a sustainable footing for profitable growth. Could that mean a rerating of the share price, too?<br /> In this episode of TC|Daily, Van Coller unpacks:<br /> • The timelines for the rights issue, what shareholders are being asked to do.<br /> • Whether EOH will need to sell more businesses, and investor concern that if it does it’ll be cutting into muscle rather than fat.<br /> • Whether the entire EOH business could be put for sale.<br /> • The profit margins that EOH can reasonably expect in the longer term.<br /> The conversation then turns to the legacy corruption issues at EOH. Here Van Coller tackles several thorny issues, including:<br /> • The civil suits against former directors, including ex-CEO and co-founder Asher Bohbot, how these suits are progressing, and their chances of success.<br /> • Whether we are likely to see criminal prosecutions against former EOH executives anytime soon.<br /> • The recent settlement with the Special Investigating Unit over corrupt dealings at the department of water & sanitation, and whether there are any other legacy issues that could cost EOH money.<br /> • EOH’s relationship (or lack thereof) with Microsoft.<br /> Lastly, Van Coller talks about his tim