- The application to the TSXV shines a spotlight on the Nordex director's recommendations and whether they are acting in the best interests of Nordex or EPC
- Shareholders should question why the Nordex directors are continuing to pursue a Cdn.$0.12 private placement when the current market price is Cdn.$0.27
- The Nordex board should postpone the meeting to allow its shareholders adequate time to consider what is best for Nordex, and to make an informed decision
- Omnia maintains its current Cdn.$0.25 per share offer price for all of the Nordex common shares
- The Omnia offer is the only transaction available to Nordex shareholders that does not heavily dilute them, or risk leaving them as stranded minorities in a controlled subsidiary
Nordex shareholders need to vote AGAINST
the inferior EPC transactions, including the highly dilutive and now massively discounted private placement, in order to preserve
their right to pursue the Omnia transaction
JOHANNESBURG, South Africa, Aug. 12, 2016 /CNW/ - Omnia Holdings Limited ("Omnia") (JSE: Share code: OMN ISIN: ZAE000005153) today announces that it has made a letter application to the TSX Venture Exchange ("TSXV") requesting that the TSXV deny conditional or final acceptance to the proposed Nordex private placement with EPC, or require that Nordex re-price the private placement to a value that reflects the fair market price of Nordex shares. On August 3, 2016, Omnia formally made a take-over bid to acquire all of the outstanding Nordex common shares (the "Offer") which now has an Offer price of Cdn.$0.25 per share.
Joseph Keenan, Managing Director of Omnia's global recognized BME mining explosives division said, "We have filed the letter application with the TSXV today to highlight for Nordex shareholders how significantly undervalued the proposed private placement with EPC is, and how it dilutes them out of control of their company."
Mr. Keenan continued, "This is also a matter of market integrity. When readily foreseeable events happen, those events have to guide what a company does. Here Nordex should not be permitted to dilute their shareholders out of their own company all the while ignoring those very same subsequent and readily foreseeable events which establish that the proposed private placement is no longer in the best interests of shareholders."
In order for Nordex shareholders to have the opportunity to pursue the Omnia Offer, they must vote AGAINST the inferior EPC transactions, including the highly dilutive and now massively discounted private placement, at the Nordex shareholder meeting to be held on August 18, 2016.
If the EPC private placement proceeds, Nordex shareholders may cede control to EPC and not be paid for doing so. If the highly-dilutive private placement with EPC takes place by the current shareholders voting in favour of it and shareholders vote AGAINST the going private transaction, then Nordex shareholders will now suffer a massive dilution at the hands of EPC resulting in a change of control of Nordex in favour of EPC, who will become the controlling 67% shareholder. In that case, Nordex shareholders will suffer becoming 33% minority shareholders in their own company and not receive a single penny for having given up that control. Nordex shareholders must know that by voting for the highly-dilutive private placement, they are voting to give up control of their company without an assurance that they will be directly paid for it.
This does not benefit Nordex shareholders, and what the Nordex board continues to ignore is that the Cdn.$4.97 million being injected by EPC is primarily to the benefit of EPC. If the Nordex board was truly concerned only with raising the funds necessary it could do it in a manner that is less dilutive or does not cause it to lose control of the company. This is what Omnia is asking the TSXV to do, or to block the proposed private placement if Nordex does not.
If Nordex raised Cdn.$4.97 million of equity at the Offer price of Cdn.$0.25 (which is the true market price) it would only need to issue 19,893,820 new common shares and EPC would not gain control of Nordex. This would provide Nordex with the same funding but with vastly less dilution and no "free" change of control of Nordex given to EPC.
If EPC were to subscribe at the Offer price of Cdn.$0.25 per share, it could achieve its 67% resulting ownership percentage, but would have to spend Cdn.$10.36 million. This would be much more advantageous to Nordex shareholders, as it would put much more money into the business of Nordex.
In both situations, EPC is worse off and Nordex shareholders are better off, yet the Nordex board seems intent on pursuing the only iteration of the private placement that results in the exact opposite.
Omnia, on the other hand, will pay full and fair value for 100% control of Nordex, and will not leave Nordex shareholders as a heavily diluted minority in their own company.
Omnia would request that the Nordex Board of Directors postpone the shareholder meeting in order for shareholders to have adequate time to review the offer and make informed decisions regarding their investments, as opposed to be rushed to a decision.
Instructions for Nordex shareholders on how to vote either in person or by proxy at the Nordex shareholder meeting to be held on August 18, 2016 can be found in the Nordex management information circular dated July 25, 2016. Additionally, shareholders with questions should contact Omnia's information agent, Laurel Hill Advisory Group, toll-free at 1-877-452-7184 or outside North America at 1-416-304-0211 or by email at email@example.com.
About the Offer and Shareholder Queries
The Offer is open for acceptance until 5:00 p.m. (Toronto time) on September 9, 2016 unless the Offer is extended or withdrawn. The Offer is subject to customary conditions, including there being validly deposited under the Offer such number of Nordex shares which constitute at least 66⅔% of the total outstanding Nordex shares, no material adverse changes in respect of Nordex, receipt of all necessary governmental and regulatory approvals and that the EPC transactions not be approved by Nordex shareholders.
The full details of the Offer are included in the formal offer and take-over bid circular and accompanying offer documents, which have been filed with the applicable Canadian securities regulatory authorities. Materials filed with the Canadian securities regulatory authorities are available electronically without charge at www.sedar.com. These materials may also be obtained without charge from Laurel Hill Advisory Group, Omnia's depositary and information agent for the Offer, by contacting them toll-free at 1-877-452-7184 or outside North America at 1-416-304-0211 or by email at firstname.lastname@example.org.
Neither Omnia nor any of its affiliates owns any securities of Nordex, and Omnia is not directly or indirectly seeking the power to act as a proxyholder for any securityholder of Nordex.
If you have any questions, or need assistance with depositing your Nordex Shares, please contact the Depositary and Information Agent for the Offer:
Laurel Hill Advisory Group
Toll-Free (North America): 1-877-452-7184
Outside North America: 1-416-304-0211
Omnia Holdings Limited is a diversified chemicals group, listed on the Johannesburg Stock Exchange with a market capitalization of R10.8 billion (Cdn.$980 million), with specialised services and solutions for the agriculture, mining and chemicals industries. Group turnover for the financial year ended 31 March 2016 was R16.8 billion (Cdn.$1.5 billion).
The Group differentiates itself from other commodity chemical providers by adding value at every stage of the supply and service chain through technological innovation and by deploying its intellectual capital. The sustainability of the business model is strengthened by targeted backward integration through the installation of technologically advanced plants that manufacture core materials such as nitric acid and explosives emulsions. In addition to securing sources of supply, this enables Omnia to improve operational efficiencies throughout the product development and production cycle.
Omnia, which has its roots in the fertilizer and agriculture industry, has built an in-depth understanding, not only of its core markets in South Africa, but also in the fundamental industries of mining and agriculture in Africa. Based in Johannesburg, South Africa and with operations in 18 countries in Africa, including South Africa, and five countries outside of Africa, Omnia has more than six decades' experience in the business. Additionally, Omnia continues to grow its global footprint, with business units in Australasia and Brazil and clients in other regions such as Europe, South America and South East Asia.
Omnia provides customised, knowledge-based solutions through its Agriculture, Mining and Chemicals divisions. These divisions include Omnia Fertilizer, BME, Protea Mining Chemicals and Protea Chemicals, all niche businesses that operate with a common objective: to enhance customers' businesses through research, development and knowledge sharing that will enable them to increase yields and by extension, profit margins. The Group's proven business model makes it a market leader in chemical services. Omnia continues to grow and prosper, offering value to its customers by tailoring its solutions to their business needs through product and service innovation, and through the expert application thereof.
For further information, please refer to the Omnia website at www.omnia.co.za.
The Mining division services the mining, quarrying and construction industries through BME and Protea Mining Chemicals. BME is a leading manufacturer and supplier of bulk explosives, related accessories and blasting services in South Africa, southern and West Africa, and Australia.
BME is a market leader in bulk emulsion and blended bulk explosives formulations for opencast mining. It produces electronic delay detonators and shocktube initiating systems, and has its own range of boosters. BME also manufactures packaged explosives for underground mining and specialised surface blasting operations. BME offers a world-class blasting consultancy service with a combination of leading edge proprietary technology and world class expertise.
Industry experts, experienced mining engineers and geologists advise and support customer operations, particularly in the use of BME's unique and proprietary BlastMap™ software solutions in conjunction with the accurate AXXIS® electronic delay detonators.
Having introduced the technology for cold emulsion explosives into South Africa over 30 years ago and being the first to introduce used oil in the manufacturing of bulk explosives, BME remains driven by innovation and technical ability. Alongside the continuous evolution of BME's explosives and related products, BME has developed the AXXIS® electronic delay detonators – now an industry standard with an easy-to-use interface – and the BlastMapIII™ software for blast design and planning. This innovative approach leverages cutting-edge knowledge within the business to create significant customer wealth through improved productivity.
For further information, please refer to the BME website at www.bme.co.za.
SOURCE Omnia Holdings Limited
For further information: Joseph Keenan - Managing Director (BME - a division of Omnia Group (Pty) Ltd), Email: email@example.com, Contact: +27 11 709 8793