This forms part of the company's strategy to right-size its balance sheet by reducing its debt levels.
EOH has achieved its first capital repayment milestone having repaid R540 million of its R1.6 billion debt.
“As part of our strategy we have been driving right-sizing our balance sheet and having a fit for purpose capital structure,” says EOH CFO Megan Pydigadu. “That includes reducing the debt levels within the organisation.”
Prior to releasing their half-year results in April, EOH had agreed with its banks to a deleveraging plan which aims to deliver R1.6 billion by 28 February 2021. “The delever was based on the sale of assets,” Megan adds. “Our first target was to delever by R500 million by 31 August. At the end of May, we had met this target and have delevered R540 million.”
The group has repaid R1.77 billion to its lenders – R1.140 billion in capital and R626 million in interest.
The company said in a statement that it continues to service its interest obligations to the lenders and paid R75 million of interest during May.
EOH has also signed agreements for the disposal of non-core assets in excess of R1.4 billion, receiving a total of R865 million in cash to date.
The sale of Dental Information System Holdings signed for R250 million has been approved by the Competition Commission and is now before the Competition Tribunal, waiting to be approved.
According to the statement, the sales processes for two of the IP assets are ongoing and are in the final stages with bidders. Additionally, the sales process for the third IP asset was launched in May, with significant interest received from various bidders.
EOH has also been able to reduce its liabilities for acquisitions from R204 million at the end of January 2020, to R114 million as at the end of May 2020.