SINGAPORE – Olam Group Limited (“Olam Group”) has achieved a significant financial milestone by acquiring a commodity Murabaha facility worth US$625 million for its food, feed, and fiber operating group, Olam Agri.
The facility has been secured by a diverse group of global investors from the U.A.E., Malaysia, Singapore, and Hong Kong.
N Muthukumar, Group CFO of Olam Group and CEO of Operations at Olam Agri, expressed his enthusiasm about the landmark financing, highlighting its importance in broadening Olam Agri’s investor base and aligning with Shariah principles.
The facility, structured as a commodity Murabaha financing, features Olam Agri subsidiaries Olam Global Agri Pte. Ltd. and Olam Global Agri Treasury Pte. Ltd. as purchasers, with a tenure of three years.
Initially guaranteed by Olam Group, the guarantee will transfer to Olam Agri after the planned IPO and demerger of Olam Agri. Proceeds from the facility will be utilized for general corporate purposes.
Emirates NBD Capital Limited and Abu Dhabi Commercial Bank have been appointed as the Global Shariah Coordinators for this facility, underscoring the adherence to Shariah principles in its execution.
The financing news coincides with commendation from the Federal Government of Nigeria for Olam Agri’s substantial investments aimed at boosting agricultural output and growth in the country.
Sen. Abubakar Kyari, CON, the Minister of Agriculture and Food Security, lauded Olam Agri during his inspection of their integrated Rice Farm and mill in Nasarawa state on March 28, 2024.
This recognition follows recent discussions between Olam Agri’s top management and government officials, indicating a mutual interest in enhancing agricultural productivity through partnership initiatives.
Furthermore, Olam Agri has reinforced its commitment to investing in Africa with the completion of the acquisition of Avisen SARL, Senegal’s second-largest poultry feed supplier, for EUR17 million (US$24.77M), securing full ownership of the company.
According to Olam, the acquisition price was determined based on the performance and prospects of Avisen, as well as the strategic fit and synergies between Olam Agri and Avisen. This strategic move underscores Olam Agri’s ambition to bolster its animal feed and protein capabilities while expanding its market presence.
The acquisition of Avisen SARL not only strengthens Olam Agri’s footprint in Africa but also aligns with its overarching strategy to invest in established businesses with robust market positions, driving sustainable growth and value creation.
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