Umongo Petroleum not part of Omnia’s sustainable future, says FD Stephan Serfontein
Omnia has sold 90 percent of its stake in Umongo Petroleum as part of its new turnaround strategy.
Omnia has sold 90 percent of its stake in Umongo Petroleum after it was identified as non-core to Omnia’s strategy, to focus on the agriculture and mining sectors.
“Management is committed to the continued strategic execution, which includes the sale of assets identified as non-core,” says group FD Stephan Serfontein.
He explains that Omnia’s turnaround is grounded by the company’s focus to grow its core businesses, which have a rich legacy and deep roots within target sectors, strengthening internal capacity and ensuring Omnia is fit to serve its markets in a sustainable way by supporting ESG and SDG goals.
“We will remain steadfast to our strategic intent and assess organic and inorganic growth opportunities based on their ability to deliver solid returns on capital to our shareholders, support our core businesses and enhance our value propositions to existing and new customers,” Stephan says.
“The sale of Umongo delivers an attractive cash receipt for Omnia, as we believe that there are limited synergistic benefits with our agriculture, mining and chemicals businesses,” he explains, adding that the deal will further strengthen Omnia’s capital position, returning over R1 billion in cash.
Stephan says the proceeds of the sale will either return cash to shareholders or be invested in strategic growth opportunities for the company.
Umongo, which is part of Omnia’s Chemicals Division, supplies lubricant additives, base oils, process oils and chemicals, as well as technical solutions to lubricant blend manufacturers in sub-Saharan Africa.
“Our relationship with Umongo will continue as a minority shareholder,” Stephan says. “Umongo will remain under the leadership of the existing CEO, Boston Moonsamy, who will also represent us on the board of Orkila South Africa, a subsidiary of Aezis S.A.”