OLAM Group’s food ingredients unit ofi has bagged export credit agency -linked financing of about US$500 million, said the group on Tuesday (Mar 12).
The facility, comprising of a five-year US$250 million tranche and a seven-year 37.38 billion yen tranche (S$338.8 million), is backed by Italian export credit agency SACE.
Proceeds from the facility will be used for general corporate purposes of ofi, said Olam.
Rishi Kalra, executive director and group chief financial officer of ofi, noted that the facility is ofi’s first export credit agency-backed loan.
“This transaction forms a part of our financing strategy to diversify sources of capital and extend our debt maturity,” said Kalra, adding that the loan would enhance ofi’s engagement with Italian customers and suppliers.
The facility has Olam Treasury as borrower and is initially guaranteed by Olam Group, which will transfer to ofi following the planned initial public offering (IPO) and demerger of ofi.
In 2020, Olam announced a re-organisation of its business to create two new coherent operating groups, namely Olam Food Ingredients (ofi) and Olam Global Agri (Olam Agri). It also disclosed its plan to maximise long-term shareholder value via carve-out and capital raising options, including IPO of the two units on a sequential basis.
Olam said in January 2023 that it planned to dual list Olam Agri in Singapore and Saudi Arabia, as well as demerge the agribusiness, as early as H1 2023. It then said in May that it did not expect the listing to be completed in the first half of this year as initially planned due to delays in approval processes.
Last August, it said it aimed to complete the IPO of Olam Agri by the first half of 2024, and reiterated that the IPO of ofi will take place after Olam Agri’s listing, subject to market conditions.
Sumitomo Mitsui Banking Corporation acted as a mandated lead arranger and bookrunner, while being a coordinator and facility agent. Citibank acted as a mandated lead arranger for the facility.
Olam shares closed flat on Monday flat at S$1.05.
