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Africa|Financial|Petroleum|Service|Products|Solutions
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africa|financial|petroleum|service|products|solutions

Omnia successfully sells majority stake in Umongo

A photo of Omnia CEO Seelan Gobalsamy

Omnia CEO Seelan Gobalsamy

1st February 2022

By: Darren Parker

Creamer Media Senior Contributing Editor Online

     

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JSE-listed diversified chemicals company Omnia Holdings has successfully concluded its divestment from petroleum products producer Umongo Petroleum, which Omnia had identified as noncore during a strategic review last year.

The divestment plans were announced in October 2021, when Omnia and minority shareholder Autumn Storm Investments negotiated a deal to each sell their majority interests in Umongo, which supplies lubricant additives, base oils, process oils and chemicals, as well as technical solutions to lubricant blend manufacturers in sub-Saharan Africa.

The transaction sees chemicals distributor Orkila – a subsidiary of specialty chemical and food ingredients industry service provider Azelis – become the 90% majority shareholder in Umongo.

Omnia, together with Autumn Storm, will retain a 10% shareholding, which is subject to a two-year option agreement.

“The successful conclusion of this transaction is a further step in the disciplined execution of our group’s strategy which has established a solid financial and operational foundation to take Omnia forward,” Omnia CEO Seelan Gobalsamy told shareholders on January 31.

Omnia, which acquired 90% of Umongo in 2017 for R637-million, will be receiving cash proceeds of about R1-billion now that the transaction has been finalised, followed by additional proceeds of between R86-million and R105-million if an option on the retained shareholding is exercised.

“The proceeds . . . provide additional optionality to create value, either through capital allocation towards growth opportunities or by returning cash to shareholders,” Gobalsamy concluded.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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