This post was originally published on this site
https://i-invdn-com.investing.com/trkd-images/LYNXMPEH7C05T_L.jpg
SINGAPORE (Reuters) -Olam International is considering raising about 2 billion pounds ($2.8 billion) through a London listing of its food ingredients unit next year, sources familiar with the matter said on Friday, as the Singapore-based trading house seeks to boost its valuation and step up acquisitions.
Olam, one of the world’s biggest agricultural commodity traders, is listing Olam Food Ingredients (OFI) as part of a business overhaul flagged last year https://www.reuters.com/article/olam-intl-restructuring-idUSL4N29O16P, under which it created two new core operating businesses.
“It will be a substantial IPO. It will be amongst the larger IPOs done on the London Stock Exchange (LSE) in the recent past,” co-founder and CEO Sunny Verghese told Reuters in an interview, while declining to give a fundraising target.
The proceeds would allow the firm to accelerate growth via acquisitions, he added.
Shares in Olam, backed by Singapore state investor Temasek Holdings and Mitsubishi Corp, were trading 3.5% higher at S$1.49 on Friday, giving it a market value of S$5.6 billion.
Verghese said OFI could join London’s FTSE-100 index of blue-chip companies.
A valuation above 4 billion pounds would enable OFI to get into the index and obtain a premium listing – which would require the company to have a free float of at least 25% and meet a tougher set of corporate governance requirements.
Winning OFI’s listing would be a boon for the LSE, which is trying to attract more global companies following Britain’s exit from the European Union. The bourse had its strongest first half for listings in 2021 since 2014, but faces growing competition from the likes of Amsterdam.
Earlier on Friday, Olam said it would also seek a concurrent secondary listing in Singapore for OFI by the first half of 2022.
Two of the sources said Olam had appointed Citigroup (NYSE:C), Credit Suisse (SIX:CSGN), HSBC, JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) to work on the IPO. Citi, HSBC and JPMorgan declined to comment and there was no immediate response from the other banks.
OFI includes Olam’s cocoa, coffee and edible nuts businesses, while Olam Global Agri (OGA) comprises grains and animal feed, edible oils, rice and cotton, among others.
Verghese said OFI’s IPO could be completed by the second quarter of next year, and OGA could be listed as early as the fourth quarter of 2022.
On Friday, Olam reported a more than doubling of first-half operational profit, excluding exceptional items, to a record S$436.6 million ($321.5 million), thanks to strong performance by both food ingredients and global agri businesses.
($1 = 0.7242 pounds)
