Omnia Holdings Limited (JSE:OMN) News - Umongo Petroleum divestment, withdrawal of cautionary and update on release of interim results

OMNIA HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1967/003680/06)
JSE code: OMN
LEI NUMBER: 529900T6L5CEOP1PNP91
ISIN: ZAE000005153
("Omnia" or the "Company" or the "Group")


UMONGO PETROLEUM DIVESTMENT, WITHDRAWAL OF CAUTIONARY AND UPDATE ON RELEASE OF INTERIM RESULTS

INTRODUCTION
Umongo Petroleum Proprietary Limited ("Umongo") has formed part of Omnia's Chemicals Division since
Omnia's wholly-owned subsidiary, Omnia Group Proprietary Limited ("OG"), acquired a 90% shareholding
therein during 2017. The maximum aggregate acquisition consideration that would have been payable by OG
if certain future earnings thresholds had been reached was R780 million. The final aggregated cash
consideration paid by OG was R637 million.

The remaining 10% of Umongo is owned by Autumn Storm Investments 294 Proprietary Limited ("Autumn
Storm"), an entity whose sole shareholder is the SDPT Trust, of which the current chief executive officer of
Umongo, Mr Boston Moonsamy, is a beneficiary.

While Omnia has not marketed its stake in Umongo actively, the business has been identified as non-core to
Omnia's stated strategy. Following a proactive approach by Azelis, S.A. and a thorough engagement process,
OG and Autumn Storm (collectively, the "Sellers") have entered into a subscription and repurchase agreement
(the "SRA") and an option agreement (the "Option Agreement") with Umongo and Orkila South Africa
Proprietary Limited, a wholly-owned subsidiary of Azelis, S.A. ("Orkila"), on the terms and conditions as set
out below (the "Transaction").

NATURE OF BUSINESS OF UMONGO
Umongo supplies lubricant additives, base oils, process oils and chemicals as well as technical solutions to
lubricant blend manufacturers in sub-Saharan Africa. It is the sole distributor for Chevron Products (base
oils) and Chevron Oronite (additives) in South Africa and several other countries in Africa.

SALIENT TERMS OF THE TRANSACTION AND EFFECTIVE DATE
The SRA
In terms of the SRA, Orkila will subscribe for newly issued shares in Umongo (the "Subscription").
Immediately after the Subscription, Umongo shall repurchase 81% of its total shares in issue prior to the
Subscription from OG and 9% of its total shares in issue prior to the Subscription from Autumn Storm (the
"Repurchase"). The aggregate price payable to the Sellers will be calculated as the sum of an agreed
enterprise value plus Umongo's working capital and cash at closing less agreed normalised working capital
and indebtedness.

The Option Agreement
Subsequent to the Subscription and the Repurchase, Orkila will hold 90% of the issued share capital of
Umongo, and OG and Autumn Storm will hold 9% and 1% of the issued share capital of Umongo respectively
(the "Option Shares").

In terms of the Option Agreement, the Sellers have granted Umongo a call option (the "Call Option") to
purchase the Option Shares, for a period of two years from the date of closing of the SRA (the "Call Period").

The price payable by Umongo for OG's Option Shares, if the Call Option is exercised within 18 months from
the date of closing of the Subscription and Repurchase, will be in a range of between R86 million and
R93 million. If the Call Option is exercised after 18 months from the date of closing of the Subscription and
Repurchase, the price payable by Umongo for OG's Option Shares will be in a range of between R86 million
and R105 million. The amount payable within the respective ranges will be dependent on Umongo's financial
performance in the 12 months preceding the month in which the Call Option is exercised.

Umongo has granted the Sellers a put option (the "Put Option") to sell the Option Shares to Umongo, which
is exercisable at the end of the Call Period. The price payable by Umongo for OG's Option Shares if the Put
Option is exercised will be calculated on the same basis as if the Call Option was exercised after 18 months
from the date of closing of the Subscription and Repurchase.

If the Call Option or the Put Option is exercised, Orkila will subscribe for more shares in Umongo in order to
provide Umongo with the funds required to satisfy the consideration payable pursuant to the Call Option or
Put Option.

Effective date
The effective date of the Transaction will be the closing date of the Transaction, which will follow the
fulfilment or waiver of the conditions precedent referred to below.

RATIONALE FOR THE TRANSACTION
Umongo is no longer core to Omnia's strategy and offers limited synergistic benefits to the Group, while the
price being offered by Orkila is attractive. The Omnia board therefore believes that the Transaction is in the
best interests of all stakeholders.

CONDITIONS PRECEDENT
The Transaction is subject to, inter alia, the following conditions precedent:
   • approval by the South African Competition Authorities; and
   • obtaining certain third-party consents.

CONSIDERATION AND APPLICATION OF PROCEEDS
Based on Umongo's latest accounts, the consideration payable to OG in terms of the Repurchase (which
excludes the proceeds of the Call Option or Put Option) is anticipated to be approximately R1 billion in cash.
The proceeds will be deployed either to organic or inorganic opportunities or returned to shareholders pursuant
to an evaluation of Omnia's balance sheet at the Company's financial year-end, being 31 March of each year.

FINANCIAL INFORMATION
The book value of 100% of Umongo's net assets as at 31 March 2021 was R757 million and the profit before
tax attributable thereto was R71 million for the 12 months ending 31 March 2021. This information has been
derived from Omnia's audited consolidated annual financial statements.

CATEGORISATION OF THE TRANSACTION
In terms of the JSE Listings Requirements, the transaction constitutes a category 2 transaction and accordingly
is not subject to shareholder approval.

WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the cautionary announcement released by Omnia on 30 September 2021 and are
advised that in light of the information contained in this announcement, the cautionary is withdrawn and
shareholders are no longer required to exercise caution when dealing in the Company's securities.

UPDATE ON RELEASE OF INTERIM RESULTS
Omnia's interim results for the six months ended 30 September 2021 are anticipated to be released on Monday,
22 November 2021.

Johannesburg
21 October 2021

Sponsor and corporate advisor
Java Capital

Legal advisor to Omnia
Webber Wentzel

Date: 21-10-2021 07:05:00
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