South African technology group EOH soars on turnaround plan

JOHANNESBURG (Reuters) - Shares in South African technology group EOH Holdings have doubled in value since Monday, after it outlined a turnaround plan that included raising 1 billion rand via asset sales.

The company’s shares stood at 21.90 rand at 1224 GMT, a 91 percent increase in value compared with the open on Monday. The stock made most of the gains on Tuesday, when it rose by 55 percent - the biggest ever daily rise.

EOH Holdings, which has been hit in recent months by a difficult trading environment, governance problems and the loss of a key contract with Microsoft, said on Tuesday it had split its operating structure into four distinct units and would sell a number of non-core assets.

The asset sales were expected to raise 1 billion rand over the next three to 12 months.

“The period under review marks the dawn of a new era for EOH,” it said in a statement also announcing delayed interim results.

EOH’s shares plummeted earlier this year after Microsoft terminated its channel partner network agreement, stripping the company of its rights to resell Microsoft products. Combined with alleged governance problems, this saw the stock lose well over half its value since February before this week’s rebound.

The share price hit an all-time low of 9.93 rand on April 10 after it announced that the results of an internal probe into corruption allegations would be announced later this month.

Reporting by Naledi Mashishi; Editing by Emma Rumney and Louise Heavens