Olam International has selected London for an IPO of its multibillion pound food ingredients business. Singapore-based agri-trading companies are looking to capitalize on investor interest in healthy food and nutrition.
The company announced Friday that Olam Food Ingredients will be listed on the London Stock Exchange in the first half of next year and is seeking a second listing in Singapore.
The move benefits the UK market, which lags behind its international competitors in the fight to attract the biggest and the best companies.
Based on the reputation of its rival food ingredients company, OFI could be big enough to win the top ranking of the FTSE 100 index. To qualify, OFI is worth over £ 4 billion and must pass a test. nationality and liquidity.
“With OFI’s current size and scale, we believe this will be a reasonable size list,” said A Shekhar, CEO of the unit. The company will be headquartered in London and Singapore.
OFI, one of the world’s largest suppliers of cocoa beans, onions, garlic, coffee and almonds, reported sales of S $ 12.5 billion and earnings before interest of S $ 800 million of Singaporean dollars ($ 600 million) last year. .. With 15,000 employees, it operates more than 100 manufacturing plants and sources its products from 2.6 million farmers around the world.
OFI’s sculpture took place last year when Oram focused on food ingredients such as cocoa, coffee, nuts and spices, as well as grains, oilseeds, cooking oil. , rice and cotton.
The idea behind this move is to create two more focused companies and capitalize on Olam’s complex corporate structure. Olam shares traded in Singapore have remained stable over the past year. Another business unit, Olam Global Agri, will seek listing 6 to 12 months after OFI begins operations in London.
OFI’s legal separation is to be completed by the end of the year.
Shekhar said London had forgotten to compete with other European exchanges due to its large and diverse investor base and a “fully developed” understanding of the food and drink industry.
“We felt the combination of primary listings in London, where the business is well understood…. A simultaneous double entry would be a good combination, ”he said.
In addition to listing, OFI will also consider raising funds to support its growth plan. Last year, Olam acquired Old Thompson, America’s largest supplier of branded spices. With a billion dollar deal
“OFI is a growing company. We see a significant pipeline of opportunities, ”says Shekhar.
OFI will be derived from Olam. In cash Distribution of shares to existing shareholders at the same time as the initial public offering in London.
Olam is dominated by Singapore public investment firm Temasek Holdings and has a 53.2% stake. Another major shareholder is Mitsubishi Motors of Japan with 15%.
Shekhar said the two shareholders are in favor of the split in a wave of consumer interest in health, taste and sustainable food sources.
OFI exists throughout the supply chain from production to trade to manufacturing and is well suited to meet the growing demand for traceable products.
“Sustainable, traceable foods tend to stay here,” Shekar said. “Another big trend is health, nutrition and wellness. Look at nuts and the protein and fiber they provide, or the flavonoids and antioxidants in coffee.
Shekhar said OFI’s capital structure determines how much debt the company will assume and its dividend policy, but not yet. The company is also in the process of identifying an independent chairman of the board.
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