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FOSKOR UPDATE
Omnia Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1967/003680/06)
Share code: OMN ISIN: ZAE000005153
(“Omnia” or “the Company” or “the Group”)
FOSKOR UPDATE
Shareholders are referred to the Company’s audited results for the year ended 31 March 2017 and integrated
annual report for the year ended 31 March 2017 (“Integrated Annual Report”) and the restatement of the prior
year results, wherein shareholders were advised that the Group has been involved in a legal dispute with Foskor
Proprietary Limited (“Foskor”) since 2014. The basis of the dispute is that despite a Tribunal Order to the contrary,
passed in 2010, since 2014, Foskor has set the domestic phosphoric acid price at a level higher than the
international price (Free On Board [FOB] Richards Bay). At the time of the distribution of the Integrated Annual
Report, Foskor’s appeal to the full bench of the High Court was pending and was subsequently dismissed on 6
November 2017, by the full bench of the High Court in Pretoria, with costs.
Foskor had 30 days to lodge an application for Leave to Appeal to the Supreme Court of Appeal, Bloemfontein by
6 December 2017. No appeal was lodged by Foskor within this timeframe. Further developments in the interim
are set out below.
Despite the dismissal of the appeal which confirmed that Foskor is not permitted to charge local customers more
than the FOB Richards Bay price for phosphoric acid, Foskor has insisted that it will not supply Omnia with
phosphoric acid if it seeks to reserve its rights when paying the higher price demanded by Foskor, or if
Omnia pays the higher price under protest as it has done so in the past. As a result, on 7 December 2017, Omnia
filed an urgent application in the High Court in Pretoria to have Foskor declared in contempt of court.
Prior to the matter being heard on 12 December 2017, the parties agreed on an interim arrangement whereby
Foskor will continue to supply Omnia with phosphoric acid at the higher price and Omnia will continue to pay the
higher price under protest, thereby reserving all Omnia’s rights whilst securing supply for the local 2017/2018
planting season. The parties will continue to seek resolution of the matter through the court process and are in
ongoing discussions with Foskor.
Omnia Fertilizer currently sources all phosphoric acid from Foskor. The basis of Omnia’s dispute, was that
Foskor, through its position as the sole producer of phosphoric acid in the region, as well as having sole access to
the import/export terminal at Richards Bay, has for the period 2014 to date, set the domestic phosphoric acid
price at a level higher than the international price. This practice took place despite a Competition Tribunal order
aimed at preventing this practice by Foskor and resulted in Omnia embarking on extensive litigation to rectify the
situation.
The effect of this practice resulted in overcharges by Foskor for the supply of phosphoric acid to Omnia and
Omnia has claimed a substantial refund from Foskor for such amounts which continue to escalate.
Shareholders are referred to the SENS announcement dated 27 June 2017 wherein the financial results for the
year ended 31 March 2017 were presented along with the restatement of the financial results for the prior year
due to the legal dispute with Foskor. The restatement resulted in a reduction of the financial results for the year
ended 31 March 2016 by R83 million (profit before tax) and R60 million (profit after tax). The financial results
exclude the contingent asset of approximately R300 million representing the estimated amount recoverable from
Foskor as at 31 March 2017. Such amount will continue to increase due to the higher charges paid under protest
and until such time as this matter is resolved through the courts or a commercially negotiated settlement.
Shareholders will continue to be updated as the matter progresses.
Johannesburg
15 December 2017
Sponsor
Merchantec Capital
Date: 15/12/2017 12:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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