Olam breaks off $156m deal on US onion and garlic facility

Mesirow has been unable to secure the required debt and equity financing.

Olam West Coast, the wholly owned subsidiary of agri-business Olam International, has terminated its sale and tiered revenue sharing arrangement of the real estate assets (RE assets) of its California-based onion and garlic processing facility with Chicago-based investment management firm Mesirow Financial, an SGX filing revealed.

The deal, announced in 2019, had a total consideration of $156.05m (US$110.3m). The arrangement was completed in December 2019 with the transfer of the titles to the RE assets by Olam and the total consideration was discharged by a cash deposit paid and a promissory note issued to Olam.

However, Mesirow notified that it has been unable to secure the required debt and equity financing to meet its obligations under the promissory note by 30 April, in light of the challenges arising from the COVID-19 pandemic.

“Considering this development and after having explored various options, the company decided that it was in its best interest to mutually agree with Mesirow to terminate the tiered revenue sharing arrangement and for Mesirow to transfer the titles of the RE assets to the company,” Olam stated.

It added that they will recognise the RE assets at current fair value, the assessment of which is
expected to be completed by 30 June.

Further, Olam has initiated the process of identifying new investors for the sale and tiered revenue share arrangement for the RE assets.