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Olam International announces renounceable, fully underwritten S$601.7 million rights issue to position for future growth

Press Release

Olam International announces renounceable, fully underwritten S$601.7 million rights issue to position for future growth

Press release

This press release is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada or Japan. This press release is not an offer of securities for sale into the United States, European Economic Area, the United Kingdom, Canada, Japan or Australia. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the Company and will contain detailed information about the Company and management, as well as financial statements. The Company has not registered and does not intend to register any of the securities referred to herein in the United States.
 

  • 3 for 20 rights issue at S$1.25 per rights share
  • Proceeds to partially repay debt used to complete acquisition of Olde Thompson and position Olam for future growth
  • Fully sub-underwritten by major shareholder Temasek

Singapore

Olam International Limited (“Olam”, “the Company” or the “Group”) is announcing a renounceable, fully underwritten rights issue as it positions itself for future growth.  

Priced at S$1.25 on a basis of 3 rights shares for every 20 existing ordinary shares, the rights issue price represents a 26.9% discount to the last traded price per share of S$1.71 on June 21, 2021 and a 24.2% discount to the theoretical ex-rights price per share of S$1.65. The rights issue is expected to raise gross proceeds of S$601.7 million.  

Group CEO and Co-founder of Olam International Sunny Verghese said:

“This rights issue, which is fully sub-underwritten by our major shareholder Temasek, provides shareholders who have supported us all these years an opportunity to further participate in Olam’s Strategic Plan for future growth. Having completed the recent acquisition of Olde Thompson1 (“OT”), a leading US private label spices and seasonings manufacturer, this is a key next step, in line with our re-organisation plan, that will bolster our balance sheet and position us well to unlock long-term value for our stakeholders.” 

 

Proceeds from the rights issue will be primarily used to partially repay the debt used to fund the acquisition of OT, which was completed on May 17, 2021 at an enterprise value of US$950 million. This acquisition is immediately accretive and provides multiple synergies, combining OFI’s strengths in global origination and sustainable supply chains with OT’s customer base and expertise in product formulation and private labels. It also builds on OFI’s two recent acquisitions in the North American spices sector of a US-based chilli pepper business2 and the onion ingredients business, Cascade Specialties.  

The rights issue proceeds will also strengthen Olam’s balance sheet, enhance its credit profile and provide financial flexibility to capture future growth in line with its Strategic Plan. 

 

Group CFO of Olam International N. Muthukumar said:

“Following the acquisition of Olde Thompson, undertaking this rights issue is the next logical step that will enable us to optimise our capital structure, thereby providing us with the readiness to capture opportunities as they arise.” 

 

Entitled shareholders who choose not to subscribe to the rights issue can also realise value by selling their “nil-paid” rights in the market. They will also be able to subscribe for excess rights shares in addition to their pro rata entitlements. The rights issue is fully sub-underwritten by Breedens Investments Pte. Ltd., a wholly-owned subsidiary of Temasek Holdings (Private) Limited, which has agreed to subscribe to any rights shares that are not taken up by other existing shareholders, with no sub-underwriting fees paid. 

The rights issue does not require shareholders’ approval as it is within the share issue mandate approved by shareholders at the Annual General Meeting held on April 23, 2021. 

The Company has appointed BNP Paribas, acting through its Singapore Branch, Credit Suisse (Singapore) Limited, DBS Bank Ltd. and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch as joint issue managers, who together with Mizuho Securities (Singapore) Pte. Ltd. are appointed as joint underwriters for the rights issue. 

Key dates 

Event Indicative Date 
Record Date  June 30, 2021 at 5.00 p.m. 
Despatch of Offer Information Statement, and accompanying application forms to Entitled Shareholders   July 5, 2021 
Closing Date  July 19, 2021 at 5.00 p.m. (9.30 p.m. for electronic applications) 
Expected date of commencement of trading on t he SGX-ST of the Rights Shares  July 28, 2021 

Notes to Editors 

This release should be read and understood only in conjunction with the full text of the announcement and presentation on this transaction lodged on SGXNET by Olam International Limited on June 22, 2021. The terms in this press release have the same meaning as the terms defined in the announcement titled “Proposed Renounceable Underwritten Rights Issue” released by the Company today. 

Olam Food Ingredients (OFI) is a new operating group born out of Olam International Limited. OFI offers sustainable, natural, value-added food and beverage ingredients and solutions so that consumers can enjoy the healthy and indulgent products they love. It consists of Olam’s industry-leading businesses of Cocoa, Coffee, Nuts, Spices and Dairy. 

OFI has built a unique global value chain presence including its own farms, farm-gate origination and manufacturing facilities. OFI partners with customers, leveraging its complementary and differentiated portfolio of “on-trend” food and beverage products, to co-create solutions that anticipate and meet changing consumer preferences as demand increases for healthier food that’s traceable and sustainable. 

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1 Please refer to Olam’s news release entitled “Olam Food Ingredients accelerates its growth strategy with a transformative US acquisition” dated April 29, 2021.

2 Please refer to Olam’s news release entitled “Olam Food Ingredients heats up Spices portfolio with US$108.5 million acquisition of a leading US chilli pepper business” dated December 21, 2020.

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About Olam International Limited (“Olam”)

Olam is a leading food and agri-business supplying food, ingredients, feed and fibre to 17,300 customers worldwide. Our value chain spans over 60 countries and includes farming, processing and distribution operations, as well as a sourcing network of an estimated 5 million farmers. 

Through our purpose to ‘Re-imagine Global Agriculture and Food Systems’, Olam aims to address the many challenges involved in meeting the needs of a growing global population, while achieving positive impact for farming communities, our planet and all our stakeholders.  

Headquartered and listed in Singapore, Olam currently ranks among the top 30 largest primary listed companies in terms of market capitalisation on SGX-ST. 

Since June 2020, Olam has been included in the FTSE4Good Index Series, a global sustainable investment index series developed by FTSE Russell, following a rigorous assessment of Olam’s supply chain activities, impact on the environment and governance transparency. The FTSE4Good Index Series identifies companies that demonstrate strong Environmental, Social and Governance (ESG) practices and is used by a variety of market participants to create and assess responsible investment funds. 

To subscribe to the Olam Newsroom please visit www.olamgroup.com (privacy statement here). If you do not wish to receive information from Olam please contact media@olamnet.com

More information on Olam can be found at www.olamgroup.com

Olam is located at 7 Straits View, Marina One East Tower #20-01, Singapore 018936.
Telephone: +65 63394100, Facsimile: +65 63399755.

 

Issued on behalf of Olam International Limited by:

WATATAWA Consulting, 77 Robinson Road, Robinson 77 #33-00, Singapore 068896

For further information, please contact:
Contacts for Olam Investor Relations
  • Aditya Renjen
  • Senior Vice President
  • +65 66031104, 96570339
  • aditya.renjen@olamnet.com
  • Chow Hung Hoeng
  • General Manager
  • +65 63179471, 98346335
  • chow.hunghoeng@olamnet.com
Contacts for WATATAWA Consulting
  • Jo Chew
  • Managing Director
  • +65 90610353
  • jchew@we-watatawa.com
  • Ong Chor Hao
  • Deputy Director
  • +65 96272674
  • chorhaoo@we-watatawa.com


IMPORTANT NOTICE 

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. 

This press release is for information only and does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire or take up, any provisional allotments of Rights Shares or Rights Shares in any jurisdiction in which such an offer or solicitation is unlawful. No person should acquire any provisional allotments of Rights Shares or Rights Shares except on the basis of the information contained in the offer information statement to be issued by the Company in connection with the Rights Issue and to be lodged with the Monetary Authority of Singapore (the “OIS”).  

This press release is not for release, publication or distribution, directly or indirectly, in or into the United States of America ("United States"), European Economic Area, the United Kingdom, Canada, Japan or Australia. This press release is not an offer of securities for sale in the United States, European Economic Area, the United Kingdom, Canada, Japan, Australia or any other jurisdiction. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with any applicable state securities laws. There will be no public offering of securities of the Company in the United States. 

The information contained in this press release is not for release, publication or distribution to persons in the United States, European Economic Area, the United Kingdom, Canada, Japan or Australia and should not be distributed, forwarded to or transmitted in or into any jurisdiction where to do so might constitute a violation of applicable securities laws or regulations. The issue, exercise or sale of provisional allotments of Rights Shares and Rights Shares and the acquisition or purchase of provisional allotments of Rights Shares and Rights Shares is subject to specific legal or regulatory restrictions in certain jurisdictions. The Company assumes no responsibility in the event there is a violation by any person of such restrictions. 

The distribution of this press release, the OIS, provisional allotment letters and/or application and acceptance forms for provisional allotments of Rights Shares and excess Rights Shares into jurisdictions other than Singapore may be restricted by law. Persons into whose possession this press release and such other documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this press release. 

All statements contained in this press release and oral statements that may be made by the Company or its Directors, officers or employees acting on its behalf, that are not statements of historical fact, constitute "forward-looking statements". Some of these statements can be identified by words that have a bias towards the future or, are forward-looking such as, without limitation, "anticipate", "aim", "believe", "could", "estimate", "expect", "forecast", "if", "intend", "may", "plan", "possible", "predict", "probable", "project", "seek", "should", "will" and "would" or other similar words. However, these words are not the exclusive means of identifying forward-looking statements. All statements regarding the Group's future financial position, operating results, business strategies, plans and future prospects are forward-looking statements. These forward-looking statements, including but not limited to statements as to the Group's revenue and profitability, prospects, future plans and other matters discussed in this press release regarding matters that are not historical facts, are merely predictions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Group's actual future results, performance or achievements to be materially different from any future results, performance or achievements expected, expressed or implied by such forward-looking statements. 

Given the risks (both known and unknown), uncertainties and other factors that may cause the Group’s actual future results, performance or achievements to be materially different from that expected, expressed or implied by the forward-looking statements in this press release, undue reliance must not be placed on these statements. The Group's actual future results, performance or achievements may differ materially from those anticipated in these forward-looking statements. None of the Company and any other person represents or warrants that the Group's actual future results, performance or achievements will be as discussed in those statements. Further, the Company disclaims any responsibility to update any of those forward-looking statements or publicly announce any revisions to those forward-looking statements to reflect future developments, events or circumstances for any reason, even if new information becomes available or other events occur in the future. 

This press release is not an offer for sale of securities into the United States or elsewhere. The provisional allotments of Rights Shares, the Rights Shares, the provisional allotment letters and/or the application forms for the Rights Shares and excess Rights Shares have not been and will not be registered under the Securities Act, or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable state securities laws. The Company does not intend to register any portion of any offering in the United States or to conduct a public offering of securities in the United States