Omnia reaches agreement to sell Oro Agri to Rovensa

Omnia Holdings, a South African diversified chemicals group, has recently announced an agreement to dispose of Oro Agri, a key asset of the company, to Rovensa, a European-headquartered business specializing in bio-control, bio-nutrition, and crop protection solutions. This strategic move comes after Omnia received interest in Oro Agri a few months ago, triggering a comprehensive review of the business by the board. The attractive price offered by Rovensa presents a unique opportunity to unlock value for Omnia's shareholders and potentially put the company in a net cash position in the coming year. Omnia CEO Seelan Gobalsamy shared insights on the transaction and its implications in an exclusive interview with CNBC Africa. Gobalsamy highlighted the financial benefits of the sale, stating that the enterprise value of 165 million rand will result in net proceeds ranging from 2.2 to 2.5 billion rand. This significant amount will allow Omnia to address its debt obligations, potentially settling all outstanding debt and transitioning to a net cash position. With the financial burden alleviated, Omnia will have the flexibility to explore organic and inorganic growth opportunities within its strategic framework. The company is also considering options such as revising its dividend policy, issuing special dividends, and implementing share buybacks to further enhance shareholder value. Moreover, Gobalsamy addressed concerns regarding the impact of the disposal on Omnia's revenue stream, noting that Oro Agri contributed approximately 15% of the company's revenue. While this divestment represents a reduction in revenue, Omnia remains optimistic about its growth prospects in other segments. The company's international business portfolio comprises agriculture, mining, and fertilizer operations. With agriculture accounting for 30% of Omnia's international business, the company intends to continue investing in this sector, along with its mining endeavors. The strong balance sheet resulting from the Oro Agri sale positions Omnia favorably to pursue strategic growth initiatives and capitalize on emerging opportunities in the global market. Looking ahead, Omnia remains committed to enhancing its presence in the agribusiness sector while leveraging the momentum from the Oro Agri transaction to drive sustainable growth and value creation for its stakeholders. By divesting non-core assets and optimizing its financial position, Omnia is poised to strengthen its competitive position and deliver long-term value to shareholders. In conclusion, the sale of Oro Agri to Rovensa represents a strategic decision by Omnia Holdings to streamline its operations, reduce debt, and focus on core business areas with significant growth potential. The transaction underscores Omnia's commitment to unlocking value for shareholders and aligning its strategic direction with evolving market dynamics. With a clear focus on financial prudence and strategic growth, Omnia is well-positioned to navigate the challenges and opportunities in the global chemicals and agriculture landscape.