Olam to seek shareholders' approval for listing of food ingredients arm
Claudia Tan HS
Singapore
OLAM International will be seeking shareholders' approval for the proposed carving out and subsequent listing of its food ingredients arm by way of a scheme of arrangement, the agri-business company announced on Tuesday (Dec 14).
The company plans to undertake a series of transactions to reorganise its business portfolio into 3 operating groups for the subsequent listing of its Olam Food Ingredients (OFI) unit to take place.
Olam is proposing to interpose 2 recently incorporated companies - Olam Group (OG Group), which is incorporated in Singapore, and its wholly owned subsidiary OFI Group (OFIGL), which is incorporated in the United Kingdom (UK).
OFI consists of the company's cocoa, coffee, edible nuts, spices and dairy businesses. The other unit, Olam Global Agri (OGA), includes Olam's grains and animal feed, edible oils, rice, cotton and commodity financial services businesses.
The final operating group comprises Olam's packaged foods, infrastructure and logistics, and Olam Palm Gabon as well as the businesses carried out by Olam Ventures Olam Technology and Business Services.
Olam is seeking an initial public offering (IPO) for its OFI business on the London Stock Exchange (LSE), with a concurrent secondary listing in Singapore.
It has therefore entered into an implementation agreement with OG to implement the proposed restructuring. Under the terms of the agreement, OG will acquire all the existing issued ordinary shares in the capital of the company held by the shareholders.
Following the exercise, Olam shareholders will receive a share each in OG for every share they own in Olam as at the scheme record date.
While no decision has been made regarding the offer structure, the new issue could result in an aggregate dilution of OG's interest in OFIGL by 20 per cent or more, said Olam.
Olam is also seeking shareholders' approval to undertake a dividend in specie, post-restructuring, of its rights, interests and benefits in and to some or all of the participatory notes it holds to OFIGL. The company has appointed Rothschild & Co Singapore as the financial adviser for the carve out and the OFI IPO.
The company and OFIGL are also working with a syndicate of banks in relation to the OFI IPO.
Shares of Olam ended Tuesday at S$1.72, down S$0.03 or 1.7 per cent.
