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Treasury & Capital Markets
Olam seeks US$2.8 billion in London IPO of food ingredients unit
Concurrent secondary listing in Singapore planned in first half of 2022
Tom King 16 Aug 2021

Food and agribusiness firm Olam International (Olam) plans to raise about US$2.8 billion through an initial public offering of its Olam Food Ingredients (OFI) unit in London next year. The Singapore-headquartered company says it is working towards a primary listing for its OFI business in London and a concurrent secondary listing in Singapore by the first half of 2022.

The listing is part of a restructuring plan The Asset first reported in January last year, which saw Olam split its business into two distinct operating groups focusing on food ingredients and the global agribusiness.

Citing shifting consumer tastes, Olam chief executive officer Sunny Verghese described the move at the time as a simplification of businesses to capitalize on key market trends, and to better position itself to a different set of global investors.

The food and agribusiness firm, whose major investor is Singapore sovereign wealth fund Temasek Holdings, has reportedly engaged Citigroup, Credit Suisse, HSBC, JPMorgan and Morgan Stanley to work on the London offering.

The announcement of the planned listings followed the company’s first-half 2021 financial results.

Operational profit after tax and minority interests (PATMI) grew by 26.7% to S$421.5 million (US$310.7 million) in the first six months of 2021, from S$332.7 million in the same period a year ago, on strong operating profit growth and lower net finance costs.

Excluding non-recurring exceptional items, group PATMI rose 116% year-on-year to S$436.6 million.

Verghese says: “Our strongest operational earnings since inception reflect the underlying strength and resilience of our businesses despite the impacts of Covid-19. We are excited about the prospects of listing OFI as an attractive play for the growing demand for natural, plant-based ingredients and value-added solutions, which are sustainably sourced and traceable.”

Olam expects the industry to continue to recover in the second half of the year, benefiting from the tailwind of encouraging macro conditions following the bounce back from the worst impacts of Covid-19.

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