MD’s sudden exit is part of a shake-up at Omnia
Adriaan de Lange leaves behind a company laden with debt of R4.4bn
The hasty departure of Omnia MD Adriaan de Lange after two years at the helm is part of a leadership shake-up at the embattled chemicals and fertiliser group as it tries to turn its fortunes around, analysts say.
Omnia announced De Lange's resignation on Wednesday, adding that he has been replaced by group finance director Seelan Gobalsamy.
This follows former chair Rod Humphris’s sudden exit in June. Humphris left as the company was grappling with a pile of debt that rapidly ballooned from R2.5bn in March 2018 to R4.4bn in the year ended March 2019 after the company made two acquisitions, Umongo Petroleum and Oro Agri.
“I am not surprised that he is going given that he was at the company when Rod Humphris was there and when much of the problems that have embattled Omnia, leading to an increase in debt and weak profitability, developed,” Anthony Clark of Small Talk Daily said.
Clark said the elevation of Gobalsamy to the CEO role was possibly at the behest of the funders to ensure continuity. He expected more Omnia executives to leave once the current R2bn rights offer was finalised.
“I think the company, given the problems that have been created by past management, needs a completely new suite and an outside vision on the company,” he said.
Gobalsamy, a chartered accountant and former CEO of emerging markets for Liberty Holdings, has been finance director since March 2019. A relative newcomer at Omnia, Gobalsamy had previously been on the Omnia board since September 2018.
Ron Klipin of Cratos Wealth said Gobalsamy’s move into the top job was logical as he had “understanding of the group’s complexities in an industry which is highly cyclical”.
He said De Lange’s departure was expected given the pressure he had endured due to the company’s debt and weak markets. The company needed a different set of skills to tackle the problems it faced, he added.
Omnia’s shares were down 5.07% to R35.03 on Thursday.