Olam Secures $4 Billion in Financing Facilities - Emerging Market Views

Olam Secures $4 Billion in Financing Facilities

Olam International obtained an aggregate US$4 billion in financing facilities from multiple banks as part of its reorganization plan, the agri-business said in a filing to the Singapore Exchange in January.

“The signing of these facilities is yet another milestone in our reorganization plan to unlock value for our stakeholders. These facilities offer us additional flexibility to allocate financing in-line with the capital structure for our three operating groups,” N Muthukumar, Olam Group’s chief financial officer and CEO of operations, said in the statement.

Under its reorganization plan, Olam will restructure into two operating groups, which will include seeking an initial public offering (IPO) for Olam Food Ingredients (OFI). Olam is planning a primary listing of OFI on the London Stock Exchange, while concurrently seeking a listing in Singapore, in the first half of this year.

The new financing facilities include a US$1.5 billion committed facility with a flexible tenor of up to three years, called Facility A, and a US$1.0 billion working capital facility, called Facility B, as well as a US$1.5 billion total increase across two bridge loan facilities announced in August 2021, called Facility C, which will be used to facilitate allocation of existing debt to Olam’s new operating groups, the filing said.

Facility A and Facility C include provisions allowing Olam to allocate the facilities to OFI, Olam Global Agri (OGA), and Olam International (OIL) operating groups after the demerger and IPO of OFI, the filing said.

OGA and its treasury entity are the co-borrowers of Facility B, the filing said.

The senior mandated lead arrangers for Facility A were ANZ, Standard Chartered Bank, and HSBC, the filing said. Facility B’s arrangers were HSBC and Standard Chartered Bank, while the additional lenders for Facility C were BNP Paribas, Credit Suisse, DBS Bank, Mizuho Bank, and Rabobank, the filing said.