Omnia CEO Seelan Gobalsamy
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.