OLAM Group to sell 35.4% stake in Olam Agri for $1.7b

Proceeds will go towards right-sizing Olam Group’s capital structure, amongst others.

OLAM Group (OGL) has announced plans to sell 35.4% of its stake in Olam Agri for $1.7b (US$1.24b) to Saudi Agricultural and Livestock Investment Company (SALIC), a wholly-owned subsidiary of the Public Investment Fund of the Kingdom of Saudi Arabia.

In a bourse filing, the group said the net proceeds from the transaction will go towards “used to repay debt at the OG Group (Olam Group Limited and its subsidiaries) level, thereby right-sizing its capital structure and reducing leverage.”

Post-transaction, OGL will remain as the majority of Olam Agri with a 64.6% stake and will realise net capital gains of $1.19b which will accrete to the equity reserves of OG Group.

The transaction is expected to be completed by the end of 2022 if all conditions set out in the undertakings are met including approval by OGL’s shareholders and other customary closing conditions, including regulatory approvals.

Temasek, OGL’s majority shareholder, has already provided an irrevocable undertaking to vote in favour of the transaction, the group said.

Meanwhile, Rothschild & Co Singapore Limited and Credit Suisse (Singapore) Limited will serve as financial advisers to Olam Group Limited on this transaction, whilst Goldman Sachs Saudi Arabia will serve as the exclusive financial adviser to SALIC.