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Olam secures $5.2Bn in loans to support business restructuring plans

Olam secures $5.2Bn in loans to support business restructuring plans

Olam International, an SGX mainboard-listed food and agri-business company, has reportedly stated in a Singapore Exchange filing that it has secured loans totaling $5.2 billion (S$7 billion) to better support its plans to reorganize its business.

According to reliable reports, the three facilities include two 18-month US$2 billion bridge loans and a US$1.2 billion term loan for three years.

The term loan will be utilized for the Olam International group's general business purposes, whereas the bridge loan will be utilized to help Olam with its reorganization plans.

Olam announced its reorganization into three business groups last month in order to unlock more value.

By the first half of next year, it aims to separate and list the firm's cocoa, edible nuts, coffee, dairy spices operations; Olam Food Ingredients (OFI), on the stock exchange. Olam's feed, fiber, and food division; Olam Global Agri (OGA), will be spun off as well, with the company aiming to list it after OFI.

The food and agree conglomerate will concentrate on investing in digital technology and sustainability start-ups once OFI and OGA are split out.

Olam's group chief financial officer, N. Muthukumar, stated that this landmark transaction provides the firm substantial flexibility to deploy finance across its three new operational units as part of its reorganization strategy. The firm thanked its banking partners for their support and strong commitment.

Following the spin-off and stock exchange listing of OFI, the terms of the three loan contracts include conditions that allow Olam to assign the facilities to operating groups OGA, OFI, and Olam International.

JP Morgan Chase Bank, Citibank, HSBC Bank, and MUFG Bank participated as the facilities’ senior mandated lead arrangers. The facility agent is HSBC.

Following the announcement, Olam's stock gained four cents, or 2.5%, to $1.64 at lunchtime on Wednesday.

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