finance news

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

Date: September 02, 2021 Sunil Jha Sunil Jha
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.



Source credit: https://www.straitstimes.com/business/companies-markets/olam-secures-7-billion-in-loans-as-restructuring-plan-advance-s

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.