Olam Agri eyes first-of-its-kind Saudi listing

Commodities giant Olam Group is considering dual-listing its agriculture business in Singapore and Saudi Arabia, with plans for an initial public offering (IPO) as early as the first half of this year.

Olam Group subsidiary Olam Agri, a major supplier of animal feed, edible oils, rice and cotton as well as a provider of commodity financial services, plans to capitalise on “rising demand for food, feed and fibre amid a greater global focus on food security”, the company says in a January 10 announcement.

As well as listing on the Singapore Exchange within six months, it will explore the possibility of listing concurrently on the Saudi Stock Exchange. The decision follows the December sale of a minority stake to the Saudi Agricultural and Livestock Company for US$1.24bn.

“If the concurrent listing takes place, the Olam Agri IPO would be the first dual-listing for a company on these two bourses and the first ever listing in Saudi Arabia of a non-Gulf Cooperation Council incorporated business,” the company says.

“The decision to target an IPO for [Olam Agri] as early as H1 2023 follows a thorough review in relation to maximising Olam Group’s long-term shareholder value. The decision also considers the global agri-business trends [and] rising food security concerns.”

Soaring agri commodity prices, in part propelled by Russia’s invasion of Ukraine, have prompted warnings from international agencies over risks to the availability of food and fertiliser, particularly in lower income countries.

Olam Group has also confirmed it still plans to list Olam Food Ingredients (OFI) on the London Stock Exchange. It had intended to do so in March last year but delayed its IPO due to challenging market conditions.

OFI was formed as part of a structural overhaul that followed a 2019 strategic review. The updated structure would see Olam’s cocoa, coffee, nuts, spices and dairy business spun off into a separate entity.

Listing the two companies will “strengthen their respective balance sheets [and] improve access to capital markets”, says Olam Group co-founder and chief executive Sunny Verghese.

The delays have not dented lenders’ appetite to provide financing to the company. OFI announced on December 9 it had secured a two-year loan facility totalling US$600mn, comprising a revolving credit facility (RCF) and a term loan.

BNP Paribas, DBS, HSBC, Mizuho, MUFG and Standard Chartered joined as senior mandated lead arrangers, with HSBC appointed as facility agent.

OFI also signed a separate US$250mn two-year RCF on January 3, with DBS as facility agent.

The proceeds of both facilities will be put towards refinancing existing loans and for general corporate purposes, the company says.

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