Olam to guarantee US$100 million loan for Olam Agri until unit is sold
The group is selling its 44.58% stake in Olam Agri to Saudi Agricultural and Livestock Investment Company
[SINGAPORE] Agribusiness Olam Group said its food, feed and fibre operating business Olam Agri, has secured a seven-year US$100 million financing facility, which will initially be guaranteed by the Singapore-listed group.
Olam said in a regulatory filing on Monday (Mar 2) that its unit will eventually be the guarantor after the group completes the proposed sale of its 44.58 per cent stake in Olam Agri to the Saudi Agricultural and Livestock Investment Company.
The proceeds, according to Olam, will be used by Olam Agri to support the flow of rice from India, Thailand and Vietnam to African countries where rice is a food staple.
Olam Agri, which sells grains and seeds and makes everything from edible oils to pasta, is one of Olam Group’s main units. It was created during a reorganisation in early 2020. The Gulf region is a growing market for the commodities it supplies and Saudi Arabia is putting a strong emphasis on food security.
The loan is provided by Dutch entrepreneurial development bank FMO.
Olam shares fell 4.4 per cent or S$0.04 to close at S$0.875 on Monday, before the announcement.
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