[SINGAPORE] Olam Group will divest and monetise all assets and businesses under its remaining Olam Group operating unit over time as part of its business reorganisation plan, it said on Monday (Apr 14).
The move is part of its business reorganisation plan and will take place depending on market conditions, and regulatory and shareholder approval, the company added.
The net sale proceeds from these divestments, alongside an estimated US$2.6 billion of gross cash proceeds from the disposal of its remaining Olam Agri stake announced in February, will finance the reorganisation.
With the intended divestments of two of its three operating groups – Olam Agri and the remaining Olam Group – the agribusiness giant intends to focus on its Olam Food Ingredients (ofi) unit, it said. Its business was carved out into the three operating groups during an earlier restructuring completed in 2022.
“Given the intended 100 per cent sale of Olam Agri to Saudi Agricultural and Livestock Investment Company and the plan to divest all the assets and businesses of the remaining (Olam) Group over time, the group’s focus will be to prioritise the value creation plan for ofi,” it said.
Elaborating on the next steps for its reorganisation, Olam said it would invest US$500 million of equity into ofi and support initiatives to unlock its full potential value. This includes exploring a concurrent listing in Europe and Singapore “at an appropriate time”.
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It previously announced plans to pursue an initial public offering for ofi. Moreover, it will bolster ofi’s balance sheet during periods of high and volatile commodity prices, it said.
The group also plans to allocate some US$2 billion to right size the remaining Olam Group’s capital structure by de-levering its balance sheet to make it debt-free and self-sustaining.
Over time, it will “responsibly divest and monetise” all of the remaining assets and businesses and progressively distribute the next proceeds to shareholders through special dividends.
Speaking on the rationale for the updated reorganisation plan, Olam said: “(It) strikes an optimal balance between the need to strengthen the group’s balance sheet and the resilience of its operating groups in the face of unprecedented macroeconomic uncertainties including tariffs, support continued profitable growth and return capital to shareholders.”
Shares of Olam were trading 5.3 per cent or S$0.045 higher at S$0.895 as at 11.07 am on Monday.
