[SINGAPORE] Olam will dispose of its entire stake in port and logistics operator Arise P&L for a US$175 million consideration, as part of plans to reorganise its business and monetise one of its units.
The agribusiness giant in a bourse filing on Thursday (Apr 17) said that it entered into a conditional sale and purchase agreement with Equitane DMCC to dispose of its whole stake in Arise P&L. This amounts to 161.1 million ordinary shares, or around 32.4 per cent of Arise P&L’s issued and paid-up share capital.
Olam will not hold any shares of Arise P&L after the sale, which is expected to complete by end-2025, subject to terms and conditions.
Arise P&L manages ports and logistics infrastructure projects in West Africa, including a mineral port and a general cargo port in Gabon, and a bulk port in San Pedro, Cote d’Ivoire.
The buyer, Equitane DMCC, is a Dubai-based long-term investment platform that creates sustainable solutions in Africa.
The proposed disposal is part of Olam’s updated business reorganisation unveiled on Apr 14. This includes plans to divest and monetise the assets and businesses of the remaining Olam group, one of three operating units carved out in the company’s earlier restructuring exercise in 2022.
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It also announced plans to inject US$500 million into its other unit, Olam Food Ingredients (ofi), and to focus on its delayed initial public offering (IPO). This follows its announcement in February that it was divesting its Olam Agri unit for US$2.6 billion.
The US$175 million consideration is “attractive” as it represents a 7 per cent premium over the carrying value of the Arise P&L shares held by Olam as at Dec 31, 2024, the group said.
The shares’ book value stood at around US$164 million as at December 2024, based on audited FY2024 accounts. This brings the excess of the estimated proceeds and gains from the proposed sale to about US$11 million, Olam said.
The group added that it will consider factors such as its future earnings, cash flow, capital requirements as well as other financial and business concerns when deciding on the use of the divestment monies.
It also said that the completion of the proposed sale is conditional, as it depends on the group and Equitane DMCC obtaining consent from multiple parties. They include the conceding authority of Cote d’Ivoire, the Gabonese Republic, and Societe Librevilloise Maritime, as well as shareholders of Arise P&L.
Olam said that it would make further announcements if material developments arise, and urged shareholders to exercise caution in dealing with its shares.
Business reorganisation, IPO plans
On Apr 14, Olam unveiled plans to invest US$500 million of equity into ofi and to deleverage its other unit – the remaining Olam group – for progressive liquidation, as part of its business reorganisation.
It intends to monetise the remaining Olam group by divesting all assets and businesses under the unit over time, and distributing the net proceeds to shareholders via special dividends.
This, along with the equity investment, will position ofi for growth and facilitate the resumption of its delayed IPO plans in both Europe and Singapore, the company said.
Shares of Olam closed unchanged on Wednesday at S$0.89.
