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Omnia media statement:
Omnia Holdings Limited, the JSE listed diversified chemicals Group, announced the successful conclusion of the fully underwritten renounceable rights offer of 100 million new ordinary Omnia shares at a subscription price of R20 per rights offer share. The R2bn raised through the rights offer will be used to repay debt, thereby significantly strengthening Omnia’s financial position.
Ralph Havenstein, Chairman of Omnia, said: “This rights offer was quite unique in that we had a very strong and supportive shareholder base that fully underwrote the offer. This approach allowed us to remove uncertainty and to set the subscription price early. We are very pleased with the strong support received for the offer and the fact that it was fully subscribed. Looking ahead, we are committed to drive long-term value for shareholders and other stakeholders that have an interest in Omnia by balancing return on capital with business risk considerations.”
The rights offer was fully underwritten by a number of prominent asset management companies whose clients are shareholders of Omnia including Allan Gray, Coronation, Foord, Kagiso, Old Mutual and Prudential. This innovative approach resulted in shareholders leading the process rather than banks as is typically the case. With the rights offer fully subscribed, the underwriters were not required to subscribe for further shares in terms of their underwriting commitments.
Seelan Gobalsamy, CEO of Omnia, commented: “The result for the rights offer is an excellent outcome for Omnia. The support demonstrated by shareholders and banks alike shows their commitment to Omnia and affirmed its strong investment case despite recent challenges. We have reached a major milestone on our way to implement the turnaround plan by stabilising Omnia’s financial position. We will now continue to focus on addressing the businesses’ performance and lead Omnia on its next growth phase in local and international markets “
The proceeds from the rights offer will be used to reduce debt levels in line with the Company’s targeted range, thereby giving Omnia access to undrawn debt facilities and reducing its cost of capital. The remainder of the bridge debt facility not settled via the rights offer proceeds, and which was secured through Omnia’s main debt lenders, is expected to be refinanced into a debt package aligned with the Company’s ongoing requirements.
“Building on the foundation laid by the recent long-term strategic investments, Omnia is well positioned to continue delivering a range of world leading value-added services to customers in the core chemicals, agriculture and mining explosives markets across the regions where we operate,” added Gobalsamy.
A key part of Omnia’s turnaround strategy requires management to focus fully on its customers across the markets in which it operates. Taking South Africa in particular, Omnia is a key player in sectors which are all experiencing tough times. The company has a long history of playing its part in uplifting these sectors by supporting its customers and their adjacent communities. This will remain a key driver as management stabilises the business and drives profitable growth opportunities.
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