Re-organisation of Gabon Special Economic Zone
Olam International Limited (“Olam” or the “Company”) had earlier announced that its associated company Gabon Special Economic Zone (“GSEZ”), has re-organised its business into three separate verticals – ARISE Port & Logistics (“ARISE P&L”), ARISE Integrated Industrial Platforms (“ARISE IIP”) and ARISE Infrastructure Services (“ARISE IS”).
The ARISE group focuses on originating, building and executing large scale infrastructure and logistics assets to address the infrastructure gap in Africa.
ARISE P&L manages ports and logistics infrastructure projects in West Africa, including a mineral port and a general cargo port in Gabon, a cargo port in Mauritania and a bulk port in San Pedro, Côte d'Ivoire. ARISE IIP manages the special economic zones in Nkok, Gabon, while ARISE IS comprises other infrastructure management and development projects.
Each vertical is a unique joint-venture partnership, with strategic partners and host government shareholders, including Africa Finance Corporation (“AFC”), Meridiam, STOA, SNEDAI and CDC Gabon.
Olam had on December 24, 2019 divested 10.0% of its stake in GSEZ SA (a subsidiary of ARISE IIP, which was referred to as ARISE IZ) to AFC which released US$59.0 million in cash and resulted in a one-time gain of US$27.0 million for Olam.
Olam has now entered into an agreement with A.P. Moller Capital (“APMC”) and AFC, who will infuse additional capital into ARISE P&L, resulting in APMC holding a 43.0% stake, with Olam and AFC holding the residual 31.0% and 26.0% stakes respectively.
This transaction, which reduces Olam’s interest in ARISE P&L from 40.5% to 31.0%, will result in a cash release of US$31.0 million, generate an estimated one-time gain of US$12.0 million for Olam. Subject to customary closing conditions, the transaction is expected to be completed by end-Q1 2020.
The re-organisation of GSEZ into the three ARISE entities is in line with Olam’s 2019-2024 Strategic Plan to extract full value from its investments in infrastructure and logistics projects in Africa and will allow each entity to pursue its own growth path and selectively expand into other markets in the continent.
Olam’s Managing Director and CEO, Infrastructure and Logistics platform (ARISE), Gagan Gupta, remarked: “Olam has played a significant role in spearheading and developing the infrastructure assets and businesses, which have now been successfully re-organised into three verticals under the ARISE brand name, with a clear, distinct focus on the growth prospects of each individual sector. We have also been successful in drawing new investors to participate in future growth prospects of each vertical.
“Going forward, APMC, along with its strategic partners, will jointly own and manage ARISE P&L’s assets in Gabon, Mauritania and Côte d’Ivoire, while AFC will lead in the growth and development of industrial projects under ARISE IIP for their next stage of growth.”