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Olam unit bags US$1.12 billion dual-currency loan facility
It will be used to refinance ofi&rsquo s existing loans and for general corporate purposes
[SINGAPORE] Agribusiness conglomerate Olam Group said on Wednesday (Dec 10) that its wholly owned subsidiary, Olam Food Ingredients (ofi), has secured a multi-tranche dual-currency term loan facility of US$1.12 billion.
The facility consists of two US dollar tranches of US$775 million in total and a tranche of 2.42 billion yuan (S$444.3 million). It will be transferred to the unit after its planned initial public offering and demerger.
&ldquo Proceeds from the facility will be applied towards the refinancing of ofi&rsquo s existing loans and general corporate purposes,&rdquo said Olam in a bourse filing.
HSBC has been appointed the facility agent. The filing noted that 12 banks participated in the facility. The lead arrangers are Cathay United Bank, China Citic Bank, Fubon Bank, Hang Seng Bank, Maybank and Shanghai Pudong Development Bank.
The mandated lead arrangers are CTBC Bank, DBS and Standard Chartered Bank (Singapore). The senior mandated lead arrangers are Bank of China, Industrial and Commercial Bank of China and HSBC.
Ofi was created in early 2020, after a reorganisation of Olam. The unit accounted for close to 40 per cent of the group&rsquo s total revenue for financial year 2024 and contributed S$14.7 billion in the first six months of 2025, said a Reuters report.
The agribusiness has expressed interested in listing its ingredients business on the premium segment of the London Stock Exchange, alongside a secondary listing in Singapore.
Brewing quietly.......
It is Olam Agri which holds the stake in Namoi, so Olam only has a 65% interest in the stake, with the Saudis owning the remainder.
The stake in Namoi itself held by Olam Agri is currently 16.3%, worth S$17m.
So the whole thing is peanuts for Olam as a whole.
The stake in Namoi itself held by Olam Agri is currently 16.3%, worth S$17m.
So the whole thing is peanuts for Olam as a whole.
tonytony ( Date: 14-Sep-2024 17:05) Posted:
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So far Olam owns how many shares in Namoi ? Will Olam make some profit if selling the shares of Mamoi ! Thanks for your info .
Alignment ( Date: 14-Sep-2024 16:46) Posted:
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It seems Olam has a lot of synergies with Namoi if the two were to merge their businesses so that would mean Olam can afford to pay much more than Louis Dreyfus and still make money. But for exactly the same reason the Australian authorities want to block the deal.
So I think it is ultimately a win win for Olam - win and it buys the company at a value accretive price, lose and it sells its shares at a profit to the winner.
So I think it is ultimately a win win for Olam - win and it buys the company at a value accretive price, lose and it sells its shares at a profit to the winner.
Over paying ?
Olam raises bid for Australia&rsquo s Namoi Cotton to A$0.75 a share
The independent directors of Namoi unanimously recommend that shareholders accept Louis Dreyfus Company Melbourne&rsquo s takeover offer
THE tussle for Australia&rsquo s largest cotton ginner is heating up. Olam Agri has raised its takeover offer to A$0.75 a share for Namoi Cotton, from A$0.70 a share.
The new offer by Olam Group&rsquo s indirect 64.57 per cent-owned subsidiary would value Namoi at A$154 million (S$134.7 million), up from rival bidder Louis Dreyfus Company Melbourne&rsquo s A$137.5 million.
This comes days after independent directors of Namoi unanimously recommended that shareholders accept Louis Dreyfus Company Melbourne&rsquo s takeover offer.
On Tuesday (Sep 10), Bloomberg reported that while Olam&rsquo s offer price of A$0.70 is marginally higher than its rival&rsquo s bid of A$0.67, Namoi Cotton believes that Olam&rsquo s bid is insufficient, given the greater uncertainty associated with it.
On Friday, Olam Agri said its offer price is almost 12 per cent more than, and superior to, its rival&rsquo s. It also urged all Namoi shareholders to reject Louis Dreyfus&rsquo offer.
Ashish Govil, managing director of Queensland Cotton and country head for Olam Agri Australia, said its proposed acquisition will not substantially lessen competition in the Australia cotton industry.
&ldquo Those familiar with the ginning services market understand the competitive nature of acquiring cotton to gin, practically making concentration of gin ownership less of an issue in today&rsquo s market,&rdquo he added.
Louis Dreyfus launched its takeover bid for Namoi last November, with a non-binding offer to purchase the balance shares at A$0.51 each.
The jostle started when Olam Agri put forward a competing takeover bid in March. Namoi said then that it was considering the bid by Olam in the context of its exclusivity obligations under the agreement with Louis Dreyfus.
Olam raises bid for Australia&rsquo s Namoi Cotton to A$0.75 a share
The independent directors of Namoi unanimously recommend that shareholders accept Louis Dreyfus Company Melbourne&rsquo s takeover offer
THE tussle for Australia&rsquo s largest cotton ginner is heating up. Olam Agri has raised its takeover offer to A$0.75 a share for Namoi Cotton, from A$0.70 a share.
The new offer by Olam Group&rsquo s indirect 64.57 per cent-owned subsidiary would value Namoi at A$154 million (S$134.7 million), up from rival bidder Louis Dreyfus Company Melbourne&rsquo s A$137.5 million.
This comes days after independent directors of Namoi unanimously recommended that shareholders accept Louis Dreyfus Company Melbourne&rsquo s takeover offer.
On Tuesday (Sep 10), Bloomberg reported that while Olam&rsquo s offer price of A$0.70 is marginally higher than its rival&rsquo s bid of A$0.67, Namoi Cotton believes that Olam&rsquo s bid is insufficient, given the greater uncertainty associated with it.
On Friday, Olam Agri said its offer price is almost 12 per cent more than, and superior to, its rival&rsquo s. It also urged all Namoi shareholders to reject Louis Dreyfus&rsquo offer.
Ashish Govil, managing director of Queensland Cotton and country head for Olam Agri Australia, said its proposed acquisition will not substantially lessen competition in the Australia cotton industry.
&ldquo Those familiar with the ginning services market understand the competitive nature of acquiring cotton to gin, practically making concentration of gin ownership less of an issue in today&rsquo s market,&rdquo he added.
Louis Dreyfus launched its takeover bid for Namoi last November, with a non-binding offer to purchase the balance shares at A$0.51 each.
The jostle started when Olam Agri put forward a competing takeover bid in March. Namoi said then that it was considering the bid by Olam in the context of its exclusivity obligations under the agreement with Louis Dreyfus.
Falling commodity prices will reduce the working capital Olam requires to do business, lowering its debt. With interest rates coming down, that is a massive double positive that will reduce interest costs.
Olam H1 profit inches up 0.2% to S$48 million
The board declares an interim dividend of S$0.03 per share
AGRI-FOOD giant Olam Group on Wednesday (Aug 14) reported a net profit of S$48.03 million for the first half-year, inching up 0.2 per cent from S$47.96 million in the year-ago period.
Earnings per share stood at S$0.0084, unchanged from the previous corresponding period.
An interim dividend of S$0.03 per share was declared for the period, unchanged from the previous year. It will be paid out to shareholders on Aug 29, after the record date of Aug 22.
The group said the slight improvement in earnings was due to operational profit growth being offset by higher net finance costs and taxes.
Operational profit increased 8.3 per cent to S$888 million in H1 2024, from S$819.6 million, mainly due to higher contributions from its food ingredients unit ofi, said the group.
Meanwhile, net finance costs rose 42.1 per cent on the year to S$733.9 million in H1 2024, mainly due to the rise in net debt from price-led working capital increases and higher average interest rates than in the previous year.
Revenue for H1, excluding exceptional items, was up 9.1 per cent to S$26.9 billion. The group attributed this to a fall in commodity prices across several products in Olam Agri portfolio, offset by higher selling prices for some products within the ofi unit.
Exceptional items, comprising costs related to closure of the fund management business and ongoing reorganisation costs including gross interest and tax, fell to S$25.6 million in H1 FY2024, from S$180.3 million.
Sales volume grew 13.9 per cent to 24.3 million tonnes in H1, mainly due to growth from Olam Agri, which helped offset the marginal reduction in sales volumes from ofi and the remaining Olam group.
Segmentally, ofi&rsquo s revenue rose 24.9 per cent to S$9.6 billion due to higher volumes in the ingredients and solutions segment, as well as higher average selling prices.
The ingredients and solutions segment recorded a slight 3.1 per cent increase in sales volume. Revenue rose by 36.9 per cent to S$5.3 billion due to higher sales prices, particularly for cocoa and coffee, as well as increased dairy volumes.
Olam Agri&rsquo s revenue increased 2.7 per cent to S$16.7 billion on the back of higher sales volumes. This was offset by lower commodity and selling prices compared with H1 last year.
The group noted that sales volumes for H1 FY2024 normalised with a 16 per cent increase from a lower base in H1 FY2023, which was characterised by delays in harvesting, grain shipments and port congestion.
Meanwhile, the remaining Olam group reported an 18.3 per cent drop in revenue to S$568.1 million, due to a decline in sales across all segments. Sales volume fell 9.8 per cent largely from de-prioritised assets and incubating businesses.
Olam group chief financial officer N Muthukumar said: &ldquo Our net finance costs increased sharply mainly due to higher working capital needs, driven by record prices for some of the commodities, including cocoa and coffee, and increased benchmark interest rates.&rdquo
There is less worry about working capital as long as it is covered by sold and hedged inventory, or secured receivables. While gearing is higher due to the need cover margin calls on hedges, as long as it covers the risk of Olam&rsquo s sold contracts and secure receivables, it would be the prudent thing, said A Shekhar, chief executive officer of ofi.
&ldquo Out of the S$5 billion working capital increase, that is almost entirely covered,&rdquo he said.
The volatility with cocoa and coffee might be alleviated in the coming months, as a new batch of crops are harvested, but it is likely prices will only fall as the supply enters the market. Olam will be focused on securing margins and returns for the elevated cost of capital.
Sunny Verghese, chief executive officer of Olam, said: &ldquo So prices will come down in three months or six months or nine months, it really doesn&rsquo t matter. We&rsquo ll do exactly what we have been doing.&rdquo
Muthukumar expects operating conditions in the second half of the year to continue being affected by geopolitical and macroeconomic factors, while inflationary pressures begin to soften.
Olam is still committed to listing ofi and Olam Agri, however the listings are dependent on factors such as the capital markets conditions and strong performance of the two entities.
The company is targeting a dual listing in Singapore and Saudi Arabia for Olam Agri, but said it would not wait for too long for regulatory approvals from Saudi authorities.
&ldquo So at some point in time, we will decide if the Saudi market is not available to us from a regulatory standpoint, we will look at other options,&rdquo said Verghese.
That' s why best to invest in dividend counters on SGX. Market undervalue the company, you cherry pick for high yield.
ahbui8 ( Date: 11-Jan-2023 11:28) Posted:
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waiting crossing over 1.30 .......
hope olam mantain the div 4 cts........long till ipo........
Yes, this is a good write out on the estimated valuation .
NOTE : it is not just about the current valuation of stock in SGX , Olam w this move is more a Global company then just SGX company.
Estimate w rising population n growing demand for food parts .....OLAM is certainly the apple of many countries . ( Spore and S Arabia now )
NOT forgetting the 2 part ( which was originally to be list first OFI ...more due to London situation ) ......a double listing is not a joke in LSE n SGX .
I even take a 50% at $9B is way above Olam value today .
DYODD
happy investing.
NOTE : it is not just about the current valuation of stock in SGX , Olam w this move is more a Global company then just SGX company.
Estimate w rising population n growing demand for food parts .....OLAM is certainly the apple of many countries . ( Spore and S Arabia now )
NOT forgetting the 2 part ( which was originally to be list first OFI ...more due to London situation ) ......a double listing is not a joke in LSE n SGX .
I even take a 50% at $9B is way above Olam value today .
DYODD
happy investing.
Dragonite ( Date: 11-Jan-2023 11:16) Posted:
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Of cos Olam is far far undervalued. Alot counters in SGX are also undervalued, that why many firm choose not to listed in SGX.
Dragonite ( Date: 11-Jan-2023 11:16) Posted:
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OLAM GROUP currently comprises of OLAM AGRI, OLAM OFI and OLAM VENTURES
OLAM GROUP current market capitalisation = 6.1 billion SGD only...
From the annoucements provided, OLAM GROUP is looking to sell 16.43% of OLAM Agri in a IPO
SALIC paid 1.24 billion USD for 35.43% stake in OLAM AGRI, implying OLAM AGRI has a valuation of 3.5 billion USD (4.6 billion SGD)
4.6 billion SGD * 16.43% = 755 million SGD (amount it is targetting to raise) --> from news reports, the amount raised could be as high as 1 billion SGD, so valuation for OLAM AGRI could be as high as 6.1 billion SGD (thats equivalent to OLAM GROUP current market capitalisation!)
48.14% of OLAM AGRI would be distributed to current shareholders
4.6 billion SGD * 48.14% = 2.2 billion SGD worth of shares of OLAM AGRI would be distributed to shareholders.
OLAM GROUP has 3.84 billion shares outstanding.
So each shareholder will get 2.2/3.84 = $0.57 worth of shares in OLAM AGRI each
If the valuation of OLAM AGRI goes as high as 6.1billion SGD,
shareholders could receive shares of OLAM AGRI worth 75 cents each!!
And then there is the OLAM OFI IPO, which is rumoured to be as large as 18 billion!
https://www.bloomberg.com/news/articles/2022-02-23/olam-said-to-add-raft-of-banks-to-ipo-of-18-billion-food-unit
But thats a story for another time.
So, do you think OLAM GROUP is undervalued or not?
OLAM GROUP current market capitalisation = 6.1 billion SGD only...
From the annoucements provided, OLAM GROUP is looking to sell 16.43% of OLAM Agri in a IPO
SALIC paid 1.24 billion USD for 35.43% stake in OLAM AGRI, implying OLAM AGRI has a valuation of 3.5 billion USD (4.6 billion SGD)
4.6 billion SGD * 16.43% = 755 million SGD (amount it is targetting to raise) --> from news reports, the amount raised could be as high as 1 billion SGD, so valuation for OLAM AGRI could be as high as 6.1 billion SGD (thats equivalent to OLAM GROUP current market capitalisation!)
48.14% of OLAM AGRI would be distributed to current shareholders
4.6 billion SGD * 48.14% = 2.2 billion SGD worth of shares of OLAM AGRI would be distributed to shareholders.
OLAM GROUP has 3.84 billion shares outstanding.
So each shareholder will get 2.2/3.84 = $0.57 worth of shares in OLAM AGRI each
If the valuation of OLAM AGRI goes as high as 6.1billion SGD,
shareholders could receive shares of OLAM AGRI worth 75 cents each!!
And then there is the OLAM OFI IPO, which is rumoured to be as large as 18 billion!
https://www.bloomberg.com/news/articles/2022-02-23/olam-said-to-add-raft-of-banks-to-ipo-of-18-billion-food-unit
But thats a story for another time.
So, do you think OLAM GROUP is undervalued or not?
Yes and most important Agri is having 2 of the largest supporter behind .....Temasek and S Arabia. LOL
Look like having secure food source companies are going to be the future.
Dyodd
Look like having secure food source companies are going to be the future.
Dyodd
rainbowman ( Date: 10-Jan-2023 21:02) Posted:
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OFA now going listing ahead of OFI. That should be good news.
Good closing up 8c ....on assure news of its listing .
Dyodd , come closer to the actual listing w expect $1B value ....Olam do have more room to move .
Dyodd , come closer to the actual listing w expect $1B value ....Olam do have more room to move .
FATABA ( Date: 06-Jan-2023 15:12) Posted:
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This giant is awake now ......w the coming listing in LSE n SGX , $1B expectation and loan approved.
Well position w a major global supply of food stuff.
I would not be surprise it will be the nex Kep or SCI .
DYODD
Well position w a major global supply of food stuff.
I would not be surprise it will be the nex Kep or SCI .
DYODD