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Declaration announcement and terms of the fully underwritten Omnia renounceable rights offer
OMNIA HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1967/003680/06)
JSE code: OMN
ISIN: ZAE000005153
("Omnia" or the "Company")
DECLARATION ANNOUNCEMENT AND TERMS OF THE FULLY UNDERWRITTEN OMNIA RENOUNCEABLE RIGHTS OFFER
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA AND JAPAN. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN OFFER OF SECURITIES IN THE UNITED STATES OR
ANY OTHER JURISDICTION.
1. Introduction
Shareholders are referred to the announcements released on the Stock Exchange News Service ("SENS")
of the JSE Limited ("JSE") on Thursday, 30 May 2019 and Tuesday, 25 June 2019, wherein Omnia
announced its intention to undertake a rights offer in the amount of R2 billion (the "rights offer"), the
announcement released on SENS on Friday, 26 July 2019 reflecting that Omnia had obtained the requisite
shareholder approvals required to enable the Company to implement the rights offer, and the
announcement released on SENS on Monday, 12 August 2019 containing details of the shareholder
underwriting agreement and the price at which rights offer shares would be offered to Omnia
shareholders.
2. Salient terms of the rights offer
Omnia proposes to raise R2 billion through an offer of 100 000 000 Omnia ordinary shares ("rights offer
shares") at a price of R20 per rights offer share ("rights offer issue price") in the ratio of 144.81803
rights offer shares for every 100 existing Omnia ordinary shares held on the record date for the rights
offer, being Friday, 6 September 2019. The rights offer issue price represents a 38% discount to the
30 day volume weighted average price of Omnia ordinary shares as at Monday, 12 August 2019.
Application will be made to the JSE for the listing on the securities exchange operated by the JSE of:
- the letters of allocation in respect of the rights offer which will be listed on the JSE from the
commencement of business on Wednesday, 4 September 2019 until the close of business on Tuesday,
17 September 2019, both days inclusive, under the JSE code OMNN and ISIN ZAE000276820; and
- the rights offer shares which will be listed with effect from the commencement of business on
Wednesday, 18 September 2019.
The rights offer shares will, upon issue and allotment, rank pari passu with all other ordinary shares.
The rights offer will allow for excess applications, which excess applications will, in compliance with the
Listing Requirements of the JSE, be allocated equitably.
3. Rationale for the rights offer
The Company's objectives when managing capital are to safeguard its ability to continue as a going
concern to provide returns for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure resulting in a reduced cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the dividends paid to
shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. The Company
monitors capital on the basis of net interest-bearing borrowings over adjusted EBITDA. The Company
aims to keep this ratio at 2.0x to 3.0x in the medium-term and below 2.0x in the long-term, measured at
year-end. The EBITDA multiples for the past two years were as follows:
2019 2018
Rm Rm
Net interest-bearing borrowings at 31 March 4 403 2 542
Adjusted earnings before interest, taxation, depreciation and 1 137 1 464
amortisation, net of impairments and other adjustments
Resultant multiple 3.9x 1.7x
The Company leveraged its balance sheet in its 2017, 2018 and 2019 financial years as part of a strategic
growth initiative, which included:
- expansion through the acquisitions of Umongo Petroleum (December 2017) and Oro Agri
(May 2018), and making market entries into new jurisdictions;
- investment in the new nitrophosphate plant; and
- investment in the Microsoft Dynamics AX system and related infrastructure.
At 31 March 2019, the Company had reached the end of its expansionary capital expenditure programme
and therefore capital expenditure will reduce in the medium term.
In the 2019 financial year, the Company 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, resulting in a net loss after tax of R407 million. Increased working capital requirements,
following the recent acquisitions and expansion into new jurisdictions, were funded through a combination
of borrowings and bank overdraft facilities.
The net loss after tax, together with the increase in the Company's debt levels, was not in line with the
Company's principal debt providers' expectations and covenant requirements. The Company proactively
engaged with its debt providers and, by 31 March 2019, the debt providers agreed to waive all potential
rights of default on existing loan facilities (disclosed as current interest-bearing borrowings and bank
overdrafts on the balance sheet) on condition that new debt terms be agreed before 25 June 2019.
The Company secured a R6.8 billion bridge debt facility with its principal debt providers, comprised of a
term loan of R5 billion, and committed overdraft and other facilities of R1.8 billion (the "bridge debt
facility"). This bridge debt facility allowed the Company to settle all existing borrowings and overdraft
facilities at 24 June 2019.
Proceeds from the rights offer will be used to partly repay the bridge debt facility. The rights offer will
reduce debt levels to be within the Company's targeted range, thereby affording the Company access to
undrawn debt facilities and reducing the Company's cost of capital.
The remainder of the bridge debt facility, after reduction by the proceeds of the rights offer, is expected
to be refinanced into a structured term loan and working capital debt package.
4. Underwriting agreement
As announced on Monday, 12 August 2019, the Company has entered into an underwriting agreement
with the following asset managers whose clients are shareholders of the Company: Allan Gray Proprietary
Limited, Coronation Asset Management Proprietary Limited, Foord Asset Management Proprietary
Limited, Kagiso Asset Management Proprietary Limited, Old Mutual Investment Group Proprietary
Limited and Prudential Investment Managers (South Africa) Proprietary Limited (collectively the
"underwriters", who may act on behalf of their clients when subscribing for shares), in terms of which
in aggregate, the underwriters (acting on behalf of their clients or as principal) have agreed to underwrite
the rights offer in its entirety (the "shareholder underwriting agreement"). The only condition to the
shareholder underwriting agreement is that Omnia publishes its rights offer circular by no later than 30
September 2019.
5. Entitlement
The allocation of rights offer shares will be such that shareholders will not be allocated a fraction of a
rights offer share, and any entitlement to receive a fraction of a rights offer share will be:
- rounded down to the nearest whole number if less than half a rights offer share; and
- rounded up to the nearest whole number if more than or equal to half of a rights offer share.
6. Conditions precedent
The implementation of the rights offer is subject to the JSE granting a listing of the letters of allocation
and the rights offer shares on the securities exchange operated by the JSE in respect of the rights offer.
7. Foreign shareholders
Foreign shareholders may be affected by the rights offer, having regard to prevailing laws in their relevant
jurisdictions. Such foreign shareholders should inform themselves with regard to and observe any
applicable legal requirements of such jurisdiction in relation to all aspects of this announcement that may
affect them, including the rights offer. It is the responsibility of each foreign shareholder to satisfy
himself/herself as to the full observation of the laws and regulatory requirements of the relevant foreign
jurisdiction in connection with the rights offer, including obtaining any governmental, exchange or other
consents or the making of any filing which may be required, the compliance with any other necessary
formalities and the payment of any issue, transfer or other taxes or other requisite payments due in such
jurisdictions. The rights offer is governed by the laws of South Africa and is subject to applicable laws
and regulations, including exchange control regulations. Nothing in this declaration announcement or the
rights offer circular referred to herein constitutes an offer of securities for sale in any jurisdiction
where it is unlawful to do so.
8. Salient dates and times
2019
Declaration announcement released on SENS on Tuesday, 27 August
Finalisation announcement released by 11:00 (SAST) on SENS on or Thursday, 29 August
about
Circular made available on Omnia's website, www.omnia.co.za, on Monday, 2 September
Last day to trade in ordinary shares in order to qualify to participate in Tuesday, 3 September
the rights offer (cum rights)
Ordinary shares commence trading ex-rights on the JSE at 09:00 Wednesday, 4 September
(SAST) on
Listing of and trading in the letters of allocation commences under JSE Wednesday, 4 September
code OMNN and ISIN ZAE000276820 at 09:00 (SAST) on
Circular and form of instruction emailed/posted to qualifying Thursday, 5 September
certificated shareholders on
Record date for the rights offer, at the close of business on Friday, 6 September
Rights offer opens at 09:00 (SAST) on Monday, 9 September
In respect of qualifying certificated shareholders, letters of allocation Monday, 9 September
credited to an electronic account held with the transfer secretaries at
09:00 (SAST) on
2019
Circular and form of instruction emailed/posted to qualifying Monday, 9 September
dematerialised shareholders on
In respect of qualifying dematerialised shareholders, CSDP or broker Monday, 9 September
accounts credited with letters of allocation at 09:00 (SAST) on
Last day to trade in letters of allocation in order to participate in the Tuesday, 17 September
rights offer on
In respect of qualifying certificated shareholders (or their renouncees) Tuesday, 17 September
wanting to sell all or some of their letters of allocation to lodge form
of instruction with the transfer secretaries by 12:00 (SAST) on
Listing of rights offer shares on the JSE commences at 09:00 (SAST) Wednesday, 18 September
on
In respect of qualifying certificated shareholders (or their renouncees) Friday, 20 September
wishing to exercise all or some of their rights, payment to be made and
form of instruction to be lodged with the transfer secretaries by 12:00
(SAST) on
Rights offer closes at 12:00 (SAST) on Friday, 20 September
Record date for letters of allocation on Friday, 20 September
Rights offer shares issued on Monday, 23 September
In respect of qualifying dematerialised shareholders (or their Monday, 23 September
renouncees or purchasers of their letters of allocation or purchasers of
qualifying certificated shareholders' letters of allocation), CSDP or
broker accounts debited with the aggregate rights offer issue price and
updated with rights offer shares at 09:00 (SAST) on
In respect of qualifying certificated shareholders (or their renouncees Monday, 23 September
or purchasers of their letters of allocation), share certificates posted by
registered post on or about
Results of the rights offer announced on SENS on Monday, 23 September
In respect of successful excess applications (if applicable), rights offer Thursday, 26 September
shares issued to qualifying dematerialised shareholders and/or share
certificates posted to qualifying certificated shareholders on or about
In respect of unsuccessful excess applications (if applicable), refunds Thursday, 26 September
made to qualifying certificated shareholders on or about
Notes:
(1) Share certificates in respect of ordinary shares may not be dematerialised or rematerialised between Wednesday,
4 September 2019 and Friday, 6 September 2019, both days inclusive.
(2) CSDPs effect payment on a delivery versus payment basis in respect of dematerialised shares.
(3) Qualifying dematerialised shareholders are required to inform their CSDP or broker of their instructions in
terms of the rights offer in the manner and time stipulated in the custody agreement governing the relationship
between the qualifying dematerialised shareholder and their CSDP or broker. Qualifying dematerialised
shareholders are advised to contact their CSDP or broker as early as possible to establish what the cut-off
dates and times are for acceptance of the rights offer, as set out in the custody agreement, as this may be
earlier than the proposed closing time of the rights offer.
9. Rights offer circular
Further details of the rights offer will be disclosed in the rights offer circular, which circular will be
available on the Company's website, www.omnia.co.za, on Monday, 2 September 2019, and will be
posted to certificated shareholders on Thursday, 5 September 2019 and to dematerialised shareholders on
Monday, 9 September 2019.
Johannesburg
27 August 2019
Financial advisor and transaction sponsor
Java Capital
Legal advisor
Webber Wentzel
Important Notice
The information contained herein is not for release, publication or distribution, directly or indirectly, in or into
the United States, its territories or possessions, Canada, Australia or Japan or any other jurisdiction in which
the distribution or release would be unlawful. These materials are not and do not contain an offer of securities
for sale or a solicitation of an offer to purchase or subscribe for securities in any jurisdiction, including the
United States, Australia, Canada or Japan or any other state or jurisdiction in which such release, publication
or distribution would be unlawful. The securities to which these materials relate (the "Securities") have not
been, and will not be, registered under the U.S. Securities Act of 1933 (the "Securities Act"), and may not be
offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the
United States unless registered under the Securities Act or pursuant to an exemption from, or in a transaction
not subject to, registration under the Securities Act. There will be no public offer of the Securities in the United
States. Subject to certain exceptions, the Securities may not be offered or sold in Australia, Canada or Japan
or to, or for the account or benefit of, any national, resident or citizen of such countries.
This announcement is only being distributed to and is only directed at: (i) persons who are outside the United
Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); or (iii) high net worth entities falling
within Article 49(2)(a) to (d) of the Order; or (iv) persons to whom it may otherwise lawfully be
communicated (all such persons together being referred to as "Relevant Persons"). The rights offer shares
are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such
rights offer shares will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person
should not act or rely on this announcement or any of its contents.
In any member state of the European Economic Area (other than the United Kingdom) that has implemented
Regulation (EU) 2017/1129 (the "Prospectus Regulation"), this announcement is only addressed to and is
only directed at qualified investors in that member state within the meaning of the Prospectus Regulation.
Date: 27/08/2019 05:34:00
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