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Omnia needs shareholders to chip in after hefty loss and spike in debt

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Chemicals and fertiliser maker needs to sell R2bn in new shares after breaching its loan covenants

Chemicals and fertiliser maker Omnia says it needs to sell R2bn worth of new shares “to ensure its long-term sustainability” after hefty losses in the year to end-March and a sharp increase in debt meant it breached its loan covenants.

Amid talks with lenders, Omnia said in April that “there is no requirement for any unscheduled repayment or recapitalisation”. Omnia said on Tuesday it made a loss after tax of R407m in the year to end-March, from a profit of R664m the previous year, as higher costs, impairments, and a sharp increase in interest payments offset a rise in revenue.

As a result of the loss and higher debt levels, the group halted final dividend payments to shareholders. Higher working capital requirements, following the acquisition of Oro Agri, were funded with borrowings and overdraft facilities, said the company, which had a negative net cash position of R1.6bn at the end of March.

 

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