Olam International Limited has announced that its operating group, OFI, which contains its cocoa division, intends to seek a primary listing on the premium segment of the London Stock Exchange – along with a concurrent listing on the Singapore Exchange by the first half of 2022, raising approximately S$2.8bn.
The Singapore-based agribusiness also released a strong set of financial results for the first six months of 2021, delivering a strong performance with operational profit after tax and minority interests (PATMI) growing by 26.7% to S$421.5m ($310.7m) in the first six months of 2021, from S$332.7m in the same period a year ago.
Excluding non-recurring exceptional items, group PATMI rose 116% year-on-year to S$436.6m.
The listing is part of a restructuring plan announced in January 2020 that saw Olam split its business into two distinct operating groups focusing on food ingredients and the global agribusiness.
Olam Co-Founder and Group CEO Sunny Verghese said: “We continue to execute our re-organisation with OFI’s planned concurrent listings in London and Singapore, representing the best combination of listing venues.
“We are excited about the prospects of listing OFI as an attractive play for the growing demand for natural, plant-based ingredients and value-added solutions, which are sustainably sourced and traceable. Separately, we are evaluating various strategies to maximise OGA’s long-term growth potential and value enhancement within the Group as it continues with its plan for carve-out, potential IPO and demerger by H1 2023.”
OFI works with some of the world’s best-known food and beverage brands, food manufacturers, retailers, and food service outlets. It also works with several niche and premium regional players and has established market-leading positions across a range of on-trend, natural and plant-based products, delivering sustainable and innovative solutions to consumers across the world.
Mark Lynch, Partner at corporate finance house, Oghma Partners, told ConfectioneryNews: “The listing of Olam ingredients in the UK is a vote of confidence in the London Equity market and reflects, amongst other things, its deep pool of liquidity. Assuming that the company does qualify as a UK Food Manufacturer, it provides a significant boost to the sector that has lost many former FTSE companies over the past twenty years, including Cadbury Schweppes, United Biscuits, Hillsdown Holdings, Albert Fisher, Northern Foods and Unigate. Importantly, it also offers investors a route into the changing world of food ingredients which is seeing an expansion in its opportunities through the growth in demand for plant-based foods, plus expanding Ag Tech and Food Tech applications and the focus of consumers and clients on traceability and sustainability.”
Along with cocoa, OFI sources other raw materials including coffee, dairy, nuts, and spices with sustainability and traceability core to its business model.
"Looking forward, we expect our industry to continue its recovery in the second half of the year, benefiting from the tailwind of favourable macro conditions following the snap back from the worst impacts of Covid-19. Notwithstanding the differential impact of Covid-19 globally, Olam continues to play an important role in providing essential food staples, food ingredients, feed and fibre to customers around the world in a safe, responsible and sustainable way,” said Verghese.