Lebashe Investment Group will not go ahead with a planned investment in EOH, a JSE-listed troubled tech firm.
The investment group announced late on Friday that it will not invest another R250 million in EOH.
In October 2018, Lebashe Investment Group announced entered into a binding long-form agreement with EOH, increasing the maximum cash injection into the technology group from R250 million to R1 billion.
The shareholding acquired through the capital injection, along with the 40 million A shares to be issued will make EOH, by a significant margin, Africa’s largest listed and empowered information technology group, said Lebashe at the time.
However, on Friday Lebashe surprised the market by stating that it has formally notified EOH of its intention not to subscribe for the R250 million Third Tranche of the Subscription Undertaking.
“Lebashe took a conscious decision to allow EOH to establish a new independent Board of Directors without representation from Lebashe until after the conclusion of the ENSafrica investigation and the determination of the impact thereof,” the investment firm said.
“Notwithstanding the decision taken by Lebashe not to subscribe for the Third Tranche in accordance with the transaction terms, the investment and strategic relationship with EOH remains important to Lebashe and Lebashe have committed to still providing the last tranche of funding originally committed to as part of the transaction subject to agreeing mutually acceptable terms and EOH shareholder approval if required.,” the firm said.
“Discussions between Lebashe and the New Board are ongoing with a view to finding a solution that is in the best interests of all capital providers.
EOH Group CEO Stephen van Coller said “We have enjoyed a valuable partnership with Lebashe over the years and look forward to exploring new, meaningful ways of evolving our collaboration for the benefit of EOH and Lebashe.”