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Olam Group will sell 35.4% of its stake in Olam Agri Holdings to Saudi Agricultural and Livestock Investment Company (Salic) for $1.2bn. The transaction is expected to be completed by end-2022 after shareholders’ approval. Salic is owned by the Public Investment Fund of the Kingdom of Saudi Arabia. Olam said that the sale is part of reorganization plans to unlock value and would help Olam Agri gain significant access to the large and high-growth Middle East market. With this deal, Olam Agri is expected to be valued at $3.5bn, and will set a benchmark for its demerger and its future IPO. Once completed, Olam Group will continue to remain the majority shareholder with 64.6%. Net proceeds from the transaction will go towards repaying debt at the group level of Olam, with net gearing reducing to 1.28x from 1.72x.
Olam’s bonds were flat with its SGD 5.5% Perp at 99.98, yielding 5.51%.
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