[SINGAPORE] Agribusiness giant Olam Group announced plans to finance the reorganisation of its business using divestment proceeds from two sources of funds.
One will be sale proceeds from the divestment of assets and businesses in the remaining Olam Group, the company said in a Monday (Apr 14) update, where it provided more details on its business reorganisation plans.
The other is proceeds of the US$2.6 billion sale of its remaining 64.6 per cent stake in Olam Agri to Saudi Agricultural and Livestock Investment Company (Salic) over two tranches, which the group announced in February. It said then that the first tranche of the divestment – involving 44.6 per cent of the stake or 1.5 billion of ordinary shares which Salic will acquire for about US$1.8 billion – is set to complete in Q4 2025.
With the intended sale of its entire Olam Agri stake to Salic alongside plans to divest assets and businesses of the remaining Olam Agri group over time, the group said it aims to focus on value creation for Olam Food Ingredients (ofi). In January 2022, the group completed the reorganisation of its business into three operating units – ofi, Olam Agri and the remaining Olam Group.
It plans to pursue an initial public offering for ofi.
Elaborating on details of its reorganisation, Olam Group said it intends to invest US$500 million of equity into ofi to continue supporting “strategic initiatives to unlock (its) full potential value”. This includes exploring a concurrent listing in Europe and Singapore at an “appropriate time”.
It will also right-size the remaining Olam Group’s capital structure by allocating some US$2 billion to de-lever its balance sheet to make the unit debt-free and self-sustaining.
The company added that it will responsibly divest and monetise all remaining Olam Group assets and businesses over time, as well as progressively distribute the net proceeds to shareholders via special dividends.
Shares of Olam ended Friday flat at S$0.85.
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