SINGAPORE – Ofi, formerly Olam Food Ingredients, has put brakes on its initial public offering (IPO) planned to take place in Q2 of 2022 due to market disruptions caused by the Russia-Ukraine conflict.
OFI, a subsidiary of Singapore-based multinational commodity trading company Olam Group, added that it remains committed to pursuing a public listing of the business.
It further noted that it will “evaluate the appropriate timing of such a listing on an ongoing basis, taking into account prevailing market conditions”.
Olam’s shares skidded 6% after the unit, following the announcement. The IPO by Olam’s unit would have ranked as one of London’s largest issues in recent years.
“This is clearly not positive but not unexpected given that Russia and Ukraine are among the largest global wheat producers, besides other products,” said Justin Tang, head of Asian research at investment advisory firm United First Partners.
In the same announcement, OFI said it has also appointed 3 non-executive directors, including Olam Group’s co-founder and group chief executive Sunny Verghese, to its board.
The other 2 comprise Temasek’s joint head of investment and head of portfolio development Nagi Hamiyeh – who is also a non-executive director of Olam Group – as well as Nancy Cruickshank.
Cruickshank currently serves as a non-executive director on the boards of London-listed apparel company The Style Group.
He also sits on the board of motor finance company Oodle Finance in the UK; Luxembourg-based shopping platform Allegro; and Irish bookmaking company Flutter Entertainment.
Olam sells stake in Olam Agri
Meanwhile, the Singapore-based commodity trader has revealed plans to sell a 35% stake in unit Olam Agri to Saudi Agricultural and Livestock Investment Co (SALIC).
The sale for a total consideration of US$1.24 billion, sets the path for a potential IPO and demerger of the unit which mainly focuses on agricultural goods commodity trading.
The potential deal is expected to Olam Agri an implied valuation of US$3.5 billion, according to a report by Zawya.
“Secondary placement for Olam Agri would lead to an immediate unlocking of value for our shareholders, set a benchmark valuation for future IPO and demerger of Olam Agri,” Olam Group Chief Executive Officer Sunny Verghese said.
SALIC is a unit of Public Investment Fund of the Kingdom of Saudi Arabia headed by Group CEO Sulaiman AlRumaih .
“Our partnership with Olam will expand SALIC’s international footprint and increase access to strategic commodities,” Sulaiman AlRumaih said.
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