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Omnia prices R2bn rights issue

Omnia to use the proceeds to reduce its debt.

South African chemicals and fertiliser maker Omnia priced its R2 billion ($130 million) rights issue at R20 per share on Monday.

Omnia, which said in May it would use the proceeds to reduce its debt, will issue 100 million shares, it said in a statement.

Omnia has been battling high debt after raising funds for two acquisitions and the construction of a fertiliser plant. Net interest-bearing borrowings stood at R4.403 billion at the end of March.

At 0859 GMT, Omnia’s shares were up 1.53% at R34.59, after slipping more than 8% at the market open.

The firm said it had also agreed an underwriting deal with investors Allan Gray, Coronation Asset Management, Foord Asset Management, Kagiso Asset Management, Old Mutual Investment Group and Prudential.

As a result of this, a standby underwriting agreement with banks had been terminated, it added.

“Receiving support from prominent asset managers who represent our shareholders affirms the investment case for Omnia as we continue to strengthen our financial position and execute on our strategy,” newly appointed Chairman Ralph Havenstein said.

Omnia, which also produces explosives, said in June it would evaluate the returns from its business units and look at cost cutting as it grapples with high debt and thin margins.

The company reported a headline loss per share of 112 cents for the year ended March 31, against a profit of 991 cents a year earlier, hurt by a volatile currency, drought, changes in the mining industry and difficult global trading conditions.

Read: Omnia to evaluate businesses as thin margins, high debt weigh

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