EOH to sell two IT businesses to Seacom for R145 million

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EOH is selling two of its companies to Seacom
EOH is selling two of its companies to Seacom

  • EOH has been on a drive to offload non-core assets as part of its turnaround strategy.
  • Company CEO  says the transaction aims to create a 'fit-for-purpose capital structure'.
  • The buyer of the entities, Seacom, operates extensive ICT infrastructure in the continent.

Technology group EOH is in the process of selling-off two of its businesses to telecommunications company, Seacom, in a deal set at R144.9 million, the company said on Thursday.

The offloading of Network Solutions (EOH-NS), and Hymax which operate under the iOCO division, is part of the company's programme of divesting non-core assets, which started two years ago as part of the firm's turnaround strategy.

The proceeds from a number of previous asset disposals have been used to reduce debt. According to CEO Stephen van Coller, the strategy includes assets that are capital intensive.

Next week's interim financial results are expected to give an indication of how much EOH has managed to slash its debt, which was last put at around R2 billion.

By selling the two entities, Van Coller said EOH had prioritised "creating a fit-for-purpose capital structure" and looked to ensure that EOH-NS and Hymax can continue investing in world-class infrastructure and maintain their service excellence.

 EOH shares jumped 7.6% to R6.50 in morning trade following the news of the sale agreement.

EOH-NS offers a wide range of voice, managed networks, security, cloud, and server hosting products. 

The buyer of the companies, Seacom, operates an extensive network of ICT infrastructure in Africa, including undersea internet cables. The company said integrating the two EOH assets into its group would allow it to expand its enterprise business offering across South Africa.

"The acquisition of EOH-NS and Hymax forms part of Seacom’s ambitious growth strategy that will transform the business into a converged telecommunications provider across Africa," said Seacom CEO Oliver Fortuin. 

He added that by expanding our on-net capabilities and reach with this acquisition and the acquisition of Hirani Telecom in Nairobi and Africell Uganda’s infrastructure, Seacom aims to provide customers with comprehensive enterprise-grade ICT solutions and quality connectivity.

Seacom launched Africa's first broadband submarine cable system along the continent's eastern and southern coasts in 2009.

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