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 left it with a funding gap.
Omnia said in April that “there is no requirement for any unscheduled repayment or recapitalisation”.The group said on Tuesday that 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.
“In the 2019 financial year, the group was adversely impacted by droughts, late rains, a volatile rand, a material slowdown in the local and international mining industry and overall difficult trading conditions,” Omnia said. The group said it had secured a 12-month R6.8bn bridging facility from its main lenders, which had allowed it to settle all existing borrowings and overdraft facilities.Proceeds from the planned R2bn rights issue would be used to partly repay the bridge facility and to allow the company to access undrawn facilities.
Omnia said in a separate statement on Tuesday that its rights offer, which needs shareholder approval, had been underwritten by Absa Bank, Investec Bank, Rand Merchant Bank and Standard Bank of SA.
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Omnia needs shareholders to chip in after hefty loss and spike in debtChemicals and fertiliser maker needs to sell R2bn in new shares after breaching its loan covenants
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