Olam International to draft OFI for IPO in London and Singapore

Olam International has been setting its interests at London and Singapore this year for their trading prospects.

The Straits Times of Singapore has recently reported that manufacturer of agri-foods Olam International has been drafting its arm for ingredients of foods, Olam Food Ingredients or OFI, for an initial public offering or IPO on the premium segment of the London Stock Exchange or LSE and a concurrent secondary listing in Singapore.

Olam announced before the market opened on Friday on August 13 that the IPO of OFI and its concurrent separation from Olam is still open for the first half of next year.

A Shekhar, chief executive officer of OFI, stated that the primary listing on the LSE will help Olam penetrate the large and diverse base of investors, deep and liquid capital markets, and strong coverage of research across the sector of food and beverage in London, adding, “The concurrent listing in Singapore will also enable us to retain our strong local shareholder base and further tap into growing investor appetite in Asia”.

Olam founded OFI in January 2020 after it reorganized into OFI and Olam Global Agri or OGA, helping it explore various capital raising options such as potential IPOs of OFI and OGA. It first announced plans to list OFI by next year in February this year.

A global supplier of food, feed, and fibre, OGA has been considering an IPO by the first half of 2023.

OFI supplies raw ingredients for foods to global brands of foods and beverages, manufacturers of foods, retailers, eating outlets, and several niche and premium regional players, with a presence in the countries that produce the raw materials for its ingredients from cocoa, coffee, nuts, and spices.

Olam posted its financial results for the first half of the year on Friday, profiting greatly by 26.7 per cent to SGD 421.5 million.

It increased its operational profit after tax and minority interests or PATMI by 116 per cent to SGD 436.6 million, its strongest since its inception.

This came as revenue grew by 33.7 per cent from SGD 17.08 billion to SGD 22.83 billion, in the period last year, from the big profits of both OGA and OFI.

OGA and OFI respectively added 67.8 and 29.8 per cent to the total revenue of the group.

OFI and OGA respectively garnered 12.6 and 48.2 per cent annually to SGD 6.8 billion and SGD 15.5 billion while their respective earnings before interest and tax or EBIT grew by 22.9 and 58.9 per cent to SGD 316.3 million and SGD 407.5 million in the first half.

Sunny Verghese, co-founder and chief executive officer of the Olam group, said that the global recovery from COVID-19 should improve the lot of the industry of commodities on food, adding that Olam has an important role “in providing essential food staples, food ingredients, feed, and fibre to customers around the world in a safe, responsible, and sustainable way”.

The shares of Olam were trading up five cents, or 3.5 per cent, to SGD 1.49 at 9.30 AM on Friday, after the announcements.