OLAM Group : VC2 0% has outlined plans to list Olam Agri, its agribusiness unit, as early as H1 2023, it said on Tuesday (Jan 10).

The move will result in a primary listing in Singapore, a concurrent one in Saudi Arabia, and a demerger of Olam Agri and Olam Group through a distribution in specie of shares in Olam Agri to shareholders.

If the transaction goes through, Olam Agri’s initial public offering (IPO) will be the first dual-listing for a company on both the Singapore and Saudi Arabia stock exchanges and the first-ever listing in Saudi Arabia for a non-Gulf Cooperation Council incorporated business, Olam Group said in a press statement.

The latest development comes days after Bloomberg reported that the group had picked banks to lead the proposed Olam Agri listing, which could raise as much as US$1 billion, according to sources.

Although no final decision has been made on the Olam Agri IPO structure, the group said the IPO might involve an offering in Singapore and globally via the issuance of Olam Agri shares and a sale of shares in Olam Agri by Olam Group.

Olam Agri will be demerged from the group through a distribution in specie of Olam Agri shares to Olam Group shareholders. They do not need to pay for any Olam Agri shares and will continue to hold their shares in the group.

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There is no change to the group’s plans for Olam Food Ingredient’s (ofi) concurrent listings in Singapore and the London Stock Exchange, it said. The IPO will take place after Olam Agri’s listing, subject to market conditions.

Olam Group said it chose SGX as its primary listing venue due to its strong investor base for food and agribusiness companies, along with continued long-term shareholder support.

The additional listing in Saudi Arabia will allow the group to access the market’s large incremental investor base. Building on its partnership with The Saudi Agricultural and Livestock Company (Salic), Olam Agri will be positioned to enhance its activities in the Gulf region, particularly in Saudi Arabia.

In December, Olam Group completed the sale of a substantial 35.4 per cent minority stake in Olam Agri to Salic for US$1.2 billion, valuing the business at about US$3.5 billion.

Olam Group chief executive Sunny Verghese said Olam Agri has demonstrated a consistent performance track record, with operating profit rising at a compound annual growth rate of 40.1 per cent over the last three years.

“With the completion of the minority stake sale and strategic partnership with Salic, Olam Agri is positioned to grow as a result of the demand for food, feed and fibre across end-consumption growth markets,” he added.

Olam Group said on Tuesday that there is no change to its plans for Olam Food Ingredient’s (ofi) concurrent listings in Singapore and the London Stock Exchange. The IPO will take place after Olam Agri’s listing, subject to market conditions.

Shares of mainboard-listed Olam Group closed 0.7 per cent or S$0.01 lower at S$1.54 on Monday.