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Olam to acquire 51% stake in Togo state-owned cotton firm for 15.3m euros
AGRI-FOOD giant Olam International has inked a deal to acquire a 51 per cent interest in Nouvelle Société Cotonnière du Togo (NSCT), Togo's state-owned cotton company.
Olam will pay 15.3 million euros (S$24.4 million) for the equity stake on a cash-free, debt-free basis and closing net working capital of about 19.1 million euros.
NSCT is responsible for all activities related to cotton in Togo, including engaging with farmers, ginning, sales and marketing of cotton and cottonseed.
The Togolese Republic and the Federation Nationale des Groupements de Producteurs de Coton du Togo, which is the national cotton farmers cooperative, will hold 24 per cent and 25 per cent in the joint venture respectively.
Olam will fund its stake acquisition by a combination of internal accruals and existing debt facilities. It expects to complete the deal in December 2020, subject to completing the privatisation procedure and customary closing conditions.
The mainboard-listed company said the transaction is not expected to have a material impact on its consolidated net tangible assets and earnings per share for the financial year ending Dec 31, 2020.
Olam shares were trading 3.7 per cent or S$0.05 higher at S$1.42 as at 3.03pm on Friday.