Olam Group announces updated reorganisation plan

A key priority is to reduce debt.

Olam Group Limited has announced the next phase of its reorganisation following the proposed sale of its remaining 64.57% stake in Olam Agri to Saudi Agricultural & Livestock Investment Company on 24 February.

The updated plan focuses on three priorities, namely reducing debt, investing in Olam Food Ingredients, and divesting the Remaining Olam Group.

To strengthen its capital position, the group intends to allocate approximately $2.63b (US$2b) towards de-leveraging the Remaining Olam Group, with the goal of making it debt-free and self-sustaining. This will provide a solid foundation for executing the next phases of its strategy.

In addition, Olam will invest $657.91m (US$500m) in ofi to support its ongoing growth and strategic initiatives. Since its formation, ofi has demonstrated resilience in the face of global challenges such as the COVID-19 pandemic, the Russia-Ukraine conflict, and commodity market volatility.

The equity injection will provide ofi with increased financial flexibility to pursue value-creation opportunities, including a potential concurrent listing in Europe and Singapore at an appropriate time.

All businesses and assets in the Remaining Olam Group will be divested over time, with net proceeds returned to shareholders through special dividends.

The updated plan will be funded by an estimated $3.39b (US$2.58b) in gross cash proceeds from the sale of its 64.57% stake in Olam Agri and by proceeds from the divestment of Remaining Olam Group assets. Tranche 1 of the Agri sale will complete once closing conditions and regulatory approvals are met.

Olam will now focus on growing ofi as its core business.

The group will also restart share buybacks, pending shareholder approval at the upcoming annual general meeting.

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