SINGAPORE – Leading global food and agri-business, Olam Group Limited has reiterated its commitment towards the proposed London listing and demerger of food ingredients unit known as ofi.
OFI’s portfolio includes cocoa, coffee and edible nuts, while the other unit, Olam Global Agri, comprises grains, edible oils, rice and cotton businesses, among others.
In its 2021 annual report titled “Transforming to serve a changing world”, the Singapore based agricultural commodities trading company noted that it was currently evaluating the timing of the listing, taking into account prevailing market conditions.
The IPO by Olam’s unit which was planned to take place in the first half of 2022 would have ranked as one of London’s largest issues in recent years.
The company, which counts Singapore state investor Temasek Holdings and Japanese trading house Mitsubishi Corp, among its backers, had also planned for a secondary listing of OFI in Singapore in the first half of 2022.
The company however noted that it does not currently expect its initial public offering (IPO) to take place in the second quarter, as previously anticipated, given market conditions.
In the annual report, Olam also reported on its 2021 achievements including progress made in its Re-organisation journey that led to the creation of three operating groups – ofi (Olam Food Ingredients), Olam Agri and the Remaining Businesses of Olam Group.
The remaining business are comprised of Olam Ventures, Olam Technology and Business Services, and Olam Global Holdco.
Olam said it is currently exploring strategic options for these businesses as well which may include sequential sale, spin-off or IPO so as to unlock long-term shareholder value
In the report, Olam noted that 2021 was the Group’s strongest financial performance since inception with revenue up 31.2% to S$47.0 billion, EBIT up 33.0% to S$1.4 billion and PATMI up 179.4% to S$686.4 million.
Olam recently announced a strategic partnership with Saudi Agricultural and Livestock Investment Company (“SALIC”) through the sale of a 35.4% minority stake in Olam Agri to SALIC for US$1.24 billion (approximately S$1.7 billion).
“The transaction unlocks value and crystallises a benchmark valuation for Olam Agri ahead of a potential future IPO and demerger,” Olam said.
The Singapore-based company plans to use the sale proceeds to right-size the Group’s capital structure and reduce its leverage.
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