The listing is part of a restructuring plan, under which Olam is splitting its portfolio of products into two new operating businesses
Singapore-based agricultural giant Olam International announced on Friday that it has chosen London for the initial public offering (IPO) of its food ingredients business.
The listing is part of a restructuring plan flagged last year, under which Olam is splitting its portfolio of diverse products into two new operating businesses as it aims to better position itself to a different set of global investors.
Olam Food Ingredients’ (OFI) IPO and concurrent demerger from its parent remain on course for the first half of next year, Olam announced before the market opened on Friday. The IPO is planned for the first half of 2022 and will be joined by a secondary listing on the Singapore Stock Exchange.
OFI is planning to raise nearly $2.76 billion, Reuters reported on Friday, citing sources familiar with the matter. Citigroup , Credit Suisse, HSBC Holdings, JPMorgan Chase and Morgan Stanley have been appointed to work on the IPO, according to Reuters.
In the first half of 2021, OFI made revenue of SGD6.8 billion ($5.01 billion) and earnings before interest and tax of SGD316.3 million ($232.81 million).
Olam International is currently listed in Singapore, with a market capitalisation of SGD5.59 billion ($4.11 billion). It is controlled by the country’s sovereign wealth fund, which has a 54% stake.
The Global Agri unit, which supplies animal feed, rice, palm oil and cotton, is the larger of the two units. It made SGD15.5 billion ($11.41 billion) revenue and SGD407.5 million ($299.94 million) profit in the first half.
OFI Chief Executive Anantharaman Shekhar said: The primary listing on the LSE will give us access to London’s large and diverse investor base, with its deep and liquid capital markets, and enable us to benefit from its strong understanding of and research coverage across the food and beverage sector.
He said: Our integrated global network, servicing large, attractive and growing end-use categories, within an expanding on-trend ingredients portfolio, makes us a compelling investment case for anyone looking to tap into growing global demand for food that is healthier, traceable and sustainable.