Singapore food conglomerate Olam Group said on Monday it would invest $500 million into its food ingredients business and divest all its remaining assets over time.
In January 2020, Olam Group Limited had announced the Re-organisation of its diverse business portfolio into three distinct operating groups – ofi (Olam Food Ingredients), Olam Agri and the Remaining Olam Group – to maximise and unlock Olam Group’s underlying shareholder value via potential carve-outs, capital raising options and asset divestments. The separation and carve-outs of the three operating entities was completed in January 2022.
Following the recent announcement of the proposed sale of the remaining 64.57% stake in Olam Agri to Saudi Agricultural & Livestock Investment Company on February 24, 2025, Olam Group today announced details on the next steps in its Re-organisation plan, to achieve three key objectives:
-Right-size the Remaining Olam Group’s capital structure by allocating approximately US$2 billion to de-lever its balance sheet and make it debt-free and self-sustaining.
-Invest US$500 million of equity into ofi and continue to support various strategic initiatives to unlock the full potential value of ofi, for example, exploring a concurrent listing in Europe and in Singapore at an appropriate time.
-Responsibly divest and monetise all of the Remaining Olam Group’s assets and businesses over time and progressively distribute the net proceeds to shareholders via special dividends.
According to the press release, the plans for ofi and the Remaining Olam Group described (including the timing of such plans) may change depending on market conditions and opportunities, and are subject to the receipt of regulatory and shareholder approvals (if required).
The Updated Re-organisation Plan is expected to be financed from two main sources of funds that are expected to become available to the Olam Group:
- Gross cash proceeds estimated at US$2.58 billion from the sale of 64.57% stake in Olam Agri (taking into account the proceeds of the Tranche 2 call/put option when exercised). Completion of Tranche 1 is expected to take place as soon as closing conditions and requisite regulatory approvals have been received.
2. Net sale proceeds from the divestment of assets and businesses in the Remaining Olam Group.
Given the intended 100% sale of Olam Agri to SALIC and the plan to divest all the assets and businesses of the Remaining Group over time, the Group’s focus will be to prioritise the value creation plan for ofi going forward.
In addition, the Group will re-initiate share buybacks under the existing share buyback mandate, which shareholders’ approval will be sought for the renewal of its mandate at the upcoming annual general meeting.
