Olam to sell 50% stake in Indonesian sugar JV for more than US$80m

AGRI-FOOD giant Olam International has agreed to sell its remaining 50 per cent stake in its Indonesian sugar joint venture (JV), Far East Agri, for between US$82.5 million and US$85 million, subject to final adjustments as provided for in the sale-and-purchase agreement.

The buyer - its JV partner Mitr Phol Sugar - had in December 2017 invested US$100 million to take up a 50 per cent stake in Far East Agri.

The latest proposed sale is in line with Olam's six-year strategic plan announced in 2019, the mainboard-listed company said in a bourse filing on Tuesday.

The plan focuses on businesses with sustainable growth potential, and divesting and/or restructuring de-prioritised assets and businesses.

The divestment and/or restructuring will free up capital that can be redeployed to prioritised businesses, the group added.

The deal is expected to complete by end-March 2020, subject to customary closing conditions. Far East Agri will then cease to be an associated company of Olam.

Olam will book a post-tax capital gain of about US$37.5 million to US$40 million upon completion of the transaction.

Olam shares were up S$0.03 or 1.7 per cent at S$1.76 during the midday break on Tuesday.