Omnia falls almost 9% after giving details about rights issue
Omnia Holdings’ share price slipped as much as 8.6% on Monday morning, after the company announced it would issue 100-million new shares at a hefty 41% discount to Thursday’s closing share price.
The listed chemicals and fertiliser maker had first announced plans to raise R2bn through new shares in May, but was criticised at the time for failing to give any details of either the price or number of shares it intended to issue.
Omnia said on Monday that it had secured agreement from its underwriters on the offer, with the only condition that it be published no later than September 30 2019.
The proceeds of the R20 per share rights offer will be used to reduce the company’s debt, which had spiked 73.2% to R4.4bn in the year to end-March, as a result of its expansion through the acquisitions of Umongo Petroleum in December 2018 and Oro Agri in May 2019.
The company’s debt compares unfavourably to its market cap of just less than R2.3bn on Thursday morning.
Omnia’s shares have lost 61% of their value so far in 2019.
At 10.30am, Omnia’s share price had pared earlier losses and was trading 2.82% lower at R33.11.
Source: businesslive.co.za