SINGAPORE – Agricultural commodity trading company Olam has picked London for the initial public offering of its multibillion-pound food ingredients business, as it looks to tap growing investor interest in healthy eating and nutrition.
The listing of Olam Food Ingredients (OFI) is part of a business overhaul flagged last year, under which it created two new core operating businesses: OFI and Olam Global Agri (OGA).
Reuters, citing people privy to the matter, said that the company is considering raising about 2 billion pounds (US$2.8 billion) from the IPO, funds which will be used to allow the firm to accelerate growth via acquisitions.
In a statement to the press, the Singapore-based agricultural trading house said Olam Food Ingredients was seeking a premium listing on the London Stock Exchange and a secondary listing in Singapore in the first half of next year.
“We are excited about the prospects of listing OFI as an attractive play for the growing demand for natural, plant-based ingredients and value-added solutions, which are sustainably sourced and traceable,” said Olam CEO Sunny Verghese
“Separately, we are evaluating various strategies to maximise OGA’s long-term growth potential and value enhancement within the Group as it continues with its plan for carve-out, potential IPO and demerger by H1 2023.”
Financial Times reported that based on the valuation of rival food ingredients businesses, OFI could be big enough to win a place in the blue-chip FTSE 100 index.
To qualify, the US business daily noted that OFI will need to be valued at more than £4bn (US$5.52bn) and pass nationality and liquidity tests.
“At OFI’s current size and scale we believe it will be a reasonable-sized listing,” said the unit’s chief executive A Shekhar. The company will be dual headquartered in London and Singapore.
The company also reported a net profit of S$421.5 million (US$310.4m) for the half-year ended June 30, 26.7 percent higher than the S$332.7 million (US$245m) a year ago.
Operational profits after tax and minority interests (PATMI) more than doubled to S$436.6 million (US$321.49m) and was the strongest since its inception as the company proceeds with its reorganisation plan previously announced in January 2020.
Revenue also grew 33.7 percent to S$22.83 billion, from S$17.08 billion (US$12.58m) a year earlier on the back of strong growth from both Olam Global Agri (OGA) as well as OFI.
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