EOH offloads remaining CCS stake for R143-million - TechCentral

EOH offloads remaining CCS stake for R143-million

Debt-laden EOH Holdings is disposing of its remaining 30% interest in Construction Computer Software (CCS) in an effort to further deleverage its balance sheet.

Subsidiary EOH Mthombo has sold its remaining 30% stake in CCS for R142.8-million to German multinational RIB Software, the JSE-listed technology services group said after markets closed in Johannesburg on Monday.

The sale comes after EOH Mthombo offloaded 70% of its shareholding in CCS to RIB Software in July 2019 for R444.4-million.

At the time, the companies concluded reciprocal put and call option arrangements in relation to the remaining 30% of CCS and 10% of the purchase consideration, or R44.4-million, was held in escrow as security for warranties.

“EOH is pleased to announce that RIB has agreed to an acceleration of the call option to purchase the remaining 30% of the issued ordinary share capital of CCS for an agreed consideration of R142.8-million, effective no later than 31 May.”

In addition to the early exercise of the call option, RIB has agreed to release the full cash amount in escrow before 30 September rather than 31 July 2021. As at 7 April, the escrow cash balance totalled R46.2-million and will continue to attract interest until settled.

Covid-19 uncertainty

“Given the significant and growing uncertainty around the global economic conditions due to Covid-19, both EOH and RIB consider the transaction to be the most prudent approach in the circumstances and in the best interest of all parties. The transaction will add to EOH’s deleveraging programme while giving RIB complete control over the business as it navigates the current environment.”

At the same time, EOH has announced that it has sold its stake in open-source software specialist LSD Information Technology.

EOH Mthombo last week reached a settlement agreement to transfer all of its shares in LSD as full and final settlement of EOH’s outstanding obligations of R96-million.

“The settlement agreement amicably cancels the initial acquisition agreement and relieves EOH of the outstanding obligations, which have proven onerous to deliver upon given EOH’s current priority to further deleverage its balance sheet.”  — © 2020 NewsCentral Media

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