Olam secures US$5.2b loans for reorganisation plans, general corporate purposes

AGRI-BUSINESS firm Olam International has secured US$5.2 billion worth of loans in part to support its business reorganisation plans, the mainboard-listed firm said in a Singapore Exchange filing on Tuesday evening.

The three facilities comprise a US$1.2 billion three-year term loan and two 18-month bridge loan facilities of US$2 billion each.

The term loan facility will be used for general corporate purposes of the Olam Group while the bridge loan facilities will be used to facilitate Olam's reorganisation plans.

Olam had announced that it plans to list Olam Food Ingredients (OFI) by the first half of 2022 as part of its ongoing business reorganisation. OFI consists of the company's cocoa, coffee, edible nuts, spices and dairy businesses.

The terms of the three facility agreements include provisions that allow Olam to allocate the facilities to OFI, Olam Global Agri and Olam International operating groups upon the demerger and listing of OFI.

Olam's Group CFO, N Muthukumar, said in a statement: "This landmark transaction gives us significant flexibility to allocate financing across our three new operating groups as part of our reorganisation plan. We thank our banking partners for their strong commitment and support."

The term loan and one of the bridge loan facilities have entities from OFI as co-borrowers, while the second bridge loan has entities from OGA and OIL as additional co-borrowers. All facilities are guaranteed by Olam.

Citibank, JP Morgan Chase Bank, MUFG Bank and HSBC participated as senior mandated lead arrangers for the facilities. HSBC is the facility agent.

Shares of Olam ended Tuesday flat at S$1.60.