Johannesburg, 18 November 2016 – Global Credit Ratings has today accorded national scale issuer ratings for Omnia Group Investments Limited of A-(ZA) and A1-(ZA) in the long term and short term respectively; with the outlook accorded as Stable.
SUMMARY RATING RATIONALE
Global Credit Ratings (“GCR”) has accorded the above credit rating(s) to Omnia Group Investments Limited’s (“Omnia Investments”) based on the following key criteria:
Omnia Investments is a wholly owned subsidiary of Omnia Holdings Limited (“Omnia Holdings”), the JSE Securities Exchange listed entity. In turn, Omnia Investments owns an 86.5% stake in Omnia Group (Pty) Limited (“Omnia Group”), which is the holding company for the various operating businesses within Omnia. The remaining shareholders in Omnia Group are two BEE schemes, namely; Sakhile 1 (10%) and Sakhile 2 (3.5%). GCR has viewed the audited financial statements for Omnia Investments and has noted that the company is purely a holding company, and in effect, acts as a treasury for the broader group, issuing debt instruments to outside parties (when needed) and on-lending the funds to group entities.
Given the above, there exists a direct and integral link between the operating companies Omnia Investments and the listed entity Omnia Holdings. Accordingly, Omnia Investments will assume the same ratings as Omnia Holdings, to which GCR has accorded a long term national scale rating of ‘A-(ZA)’ and a short term national scale rating of ‘A1-(ZA)’.
Any factors that would impact the Omnia Holdings ratings would have a direct and corresponding impact on the ratings accorded to Omnia Investments. Going forward, the credit ratings for Omnia Investments and Omnia Holdings will be reviewed concurrently.
|NATIONAL SCALE RATINGS HISTORY|
|Omnia Holdings Limited|
|Initial rating (March 2009)|
|Long term: BBB+(ZA); Short term: A2(ZA)|
|Last rating (July 2016)|
|Long term: A-(ZA); Short term A1-(ZA)|
|Sector Head: Corporate and Public Sector Ratings|
|Senior Credit Analyst|
APPLICABLE METHODOLOGIES AND RELATED RESEARCH
Criteria for Rating Corporate Entities, updated February 2016
Omnia Holdings Limited Rating Reports 2009-2016
Omnia Holdings Limited credit rating announcement, issued on 18 August 2016 and available on GCR’s website www.globalratings.net
RATING LIMITATIONS AND DISCLAIMERS
ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.NET/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK: HTTP://GLOBALRATINGS.NET/RATINGS-INFO. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT HTTP://GLOBALRATINGS.NET.
GLOSSARY OF TERMS/ACRONYMS USED IN THIS DOCUMENT AS PER GCR’S CORPORATE GLOSSARY
|Debt||An obligation to repay a sum of money. More specifically, it is funds passed from a creditor to a debtor in exchange for interest and a commitment to repay the principal in full on a specified date or over a specified period.|
|Equity||Equity is the holding or stake that shareholders have in a company. Equity capital is raised by the issue of new shares or by retaining profit.|
|Long-Term Rating||A long term rating reflects an issuer’s ability to meet its financial obligations over the following three to five year period, including interest payments and debt redemptions. This encompasses an evaluation of the organisation’s current financial position, as well as how the position may change in the future with regard to meeting longer term financial obligations.|
|Maturity||The length of time between the issue of a bond or other security and the date on which it becomes payable in full.|
|National Scale Rating||The national scale provides a relative measure of creditworthiness for rated entities only within the country concerned. Under this rating scale, a ‘AAA’ long term national scale rating will typically be assigned to the lowest relative risk within that country, which in most cases will be the sovereign state.|
|Shareholder||An individual, entity or financial institution that holds shares or stock in an organisation or company.|
|Short-Term Rating||A short term rating is an opinion of an issuer’s ability to meet all financial obligations over the upcoming 12 month period, including interest payments and debt redemptions.|
SALIENT FEATURES OF ACCORDED RATINGS
GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the rating is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.
Omnia Group Investments Limited participated in the rating process via face-to-face management meetings, teleconferences and other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible.
The credit ratings has been disclosed to Omnia Group Investments Limited with no contestation of the rating.
The information received from Omnia Group Investments Limited and other reliable third parties to accord the credit ratings included;
- Audited financial results for Omnia Holdings Limited per 31 March 2016 (plus four years of comparative numbers)
- Audited financial results for Omnia Group Investments Limited per 31 March 2016
- Corporate organogram
- Information used to review the Omnia Holdings ratings, per the August 2016 report
The ratings above were solicited by, or on behalf of, the rated client, and therefore, GCR has been compensated for the provision of the ratings.
GCR accords Omnia Group Investments Limited’s a rating of A-(ZA); Outlook Stable.