Tata Chem pulls out of Olam's Gabon project

OLAM International said on Friday night that Tata Chemicals will no longer be taking a 25.1 per cent equity stake in its fertiliser project in Gabon.

This follows doubt over Olam's ability to divest part of its stake in the capital-intensive project in Western Africa - including doubts cast by Muddy Waters in a report last year.

In its statement to the Singapore Exchange, Olam said that the decision was made because Tata Chemicals has shifted its investment focus away from overseas fertiliser manufacturing, and because of Olam's intention to move to a minority and non-consolidated position in the project. They thus agreed on Friday to terminate a plan announced in 2011 for Tata Chemicals to invest US$290 million for a 25.1 per cent stake.