Omnia wraps up Oro Agri sale


Omnia wraps up Oro Agri sale

Published Date: 2021-01-13 | Source: Stephen Gunnion | Author: Stephen Gunnion

Omnia wraps up Oro Agri sale

The disposal, announced last October, will help the fertiliser and chemicals group pay off debt and return cash to shareholders.

Omnia has finalised the sale of its Oro Agri subsidiary to European company Rovensa after shareholders gave the deal the nod last month. In an update yesterday, the fertiliser and chemicals group said the agreement was now unconditional.

The company announced the sale in October after receiving an unsolicited approach for the AgriBio (agricultural biological) business. The transaction will result in net proceeds of about $152 million (R2.37 billion), which will leave Omnia debt free. By the end of September, net debt had reduced to R1.94 billion from R3.29 billion a year earlier. When it announced the deal, it said surplus cash would be returned to shareholders - either through a special dividend or share buybacks.

Omnia paid $100 million for Oro Agri in 2018, adding to a debt pile that eventually became unsustainable. It said the higher price it fetched through the disposal reflected the synergies that existed between Rovensa and Oro Agri that Omnia didn't have. Rovensa produces and distributes biocontrol, bionutrition and crop protection solutions while Oro Agri is involved in the research and development, production and sales of a range of patented agriculture biological products. Omnia said it had been a relatively passive investor and in order to enable its full potential, it would have to invest significant additional capital in Oro Agri and fully integrate it into its operations.

The company's shares rose 2.45 to R45.62 yesterday.

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