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Olam books US$27m gain from Gabon divestment

COMMODITY trader Olam International will book a one-time gain of US$27 million from divesting part of its stake in a Gabon joint venture, it said on Tuesday.

The divestment is part of the reorganisation of joint-venture company Gabon Special Economic Zone (GSEZ), which mixes the interests of Olam with the Gabonese Republic and the African Finance Corporation.

GSEZ's mandate is to develop infrastructure in Gabon, and it is reorganising its infrastructure and logistics business into three verticals – ARISE Port & Logistics, ARISE Industrial Zones and ARISE Infrastructure Services, Olam said.

As part of this reorganisation, Olam has divested 10 per cent of its existing 40.5 per cent stake in ARISE Industrial Zones to African Finance Corporation for US$59 million. The transaction releases US$59 million in cash and results in a one-time gain of US$27 million for Olam.

The transaction is not expected to have a material impact on Olam's consolidated net tangible assets and earnings per share for the financial year ending Dec 31, 2019.

Olam shares rose one Singapore cent or 0.56 per cent to S$1.80 on Tuesday.