Chemicals and agricultural group Omnia Holdings has reached an agreement to sell its Oro Agri business to European agricultural company, Rovensa for $146 million (about R2.4 billion at current exchange rates).
Omnia acquired Oro Agri, an agribio business that provides crop protection solutions, biocontrol and bionutrition, in 2018.
The disposal follows Ominia’s strategy deal with debt that had risen to R4.4 billion in 2019. It has managed to reduce this to R1.88 billion according to its results for the year ended March 2020.
“Omnia’s current core debt is at a level that, while not negatively impacting Omnia’s trading, requires careful capital allocation to support growth across its businesses,” the group said in an update on Monday.
The Sandton-headquartered company explained that it has been a passive investor since acquiring Oro Agri and it would have had to invest significant capital into the business in order for it to realise its full potential. Omnia will use the proceeds of the sale towards repaying its debt.
Oro Agri has research and development, as well as manufacturing facilities in South Africa, Brazil, the US and Europe. The business contributed less than 15% of Omnia’s R1.8 billion earnings for the year ended March 2020.
*This article has been changed to reflect that Rovensa is based in Europe