South Africa’s Omnia Holdings said on Tuesday that its creditors had agreed to restructuring talks and there was no need for it to make any unscheduled repayment, sending shares in the chemicals and fertiliser maker nearly 20% higher.
Omnia said in a stock market statement that it was in talks with creditors to re-organise increased debts which it amassed during an expansion drive.
Shares in Omnia jumped to R63.93 by 1145 GMT, although they had fallen back slightly to R58.95 at 1415 GMT, nevertheless up 18% on Friday’s close.
“At this stage, the Group and these debt providers are still assessing the appropriateness of the required debt package… and there is no requirement for any unscheduled repayment or recapitalisation,” the statement said.
“The group expects that the engagement with its debt providers will culminate in an acceptable solution.”
Omnia warned in March that its full-year basic earnings could plummet by as much as 160% after the spike in debt, which was raised to fund two acquisitions and the construction of a new fertiliser plant. Its earnings were also hit by poor market conditions in Zimbabwe.
A further trading statement would be released once there was a reasonable degree of certainty of the impact the debt restructuring would have on its full year results, Omnia said.
It intends to inform shareholders about the outcome of the talks when its full-year results are published in June.