Corporate & Commercial

EOH/Lebashe R1 Billion BEE Equity Transaction

EOH Holdings Limited ("EOH") a JSE-listed technology company and one of Africa's largest technology service providers will implement a R1 billion BEE transaction and long-term strategic partnership with black-owned investment vehicle Lebashe Investment Group Proprietary Limited ("Lebashe"), in terms of which Lebashe will, inject R1 billion of equity into EOH and following the culmination of the transaction effectively increase EOH's BEE ownership to over 50%.

In terms of the deal, Lebashe will subscribe for equity in EOH through (i) an initial subscription for new EOH ordinary shares at a 10% discount for an aggregate cash consideration of R250 million (ii) a subscription undertaking in terms of which Lebashe is obliged to subscribe for three additional tranches of EOH ordinary shares within specified time periods, at a 10% discount for an aggregate cash consideration of R750 million and (iii) the creation and issue of 40 million A shares which, will entitle Lebashe to a capitalisation issue of EOH ordinary shares at the end of the five year transaction term.

Lebashe will subscribe for the A shares at a nominal value. The A shares entitle Lebashe to full voting rights and dividends equivalent to 15% of the dividends paid by EOH in respect of its ordinary shares throughout the transaction term, with the remaining 85% portion being factored into the determination of the number capitalisation shares to be issued in respect of the A shares at the end of the transaction term.

The transaction is considered to be a landmark BEE transaction within the technology sector, which will make EOH the largest listed majority black-owned IT group in South Africa and massively strengthen its competitive positioning across all market segments.