Olam: sells remaining stake in Far East Agri

Singapore / SG. (oi) Global food and agri-business Olam International Limited has entered into an agreement to sell its remaining 50.0% equity stake in Indonesian sugar joint-venture Far East Agri to its joint venture partner Mitr Phol Sugar Corporation for a total consideration between USD 82.5 million and USD 85.0 million, subject to final adjustments as provided in the sale and purchase agreement. The consideration was arrived at on a willing buyer-willing seller basis.

Olam’s sale of its shareholding in the sugar joint venture is in line with its six-year Strategic Plan announced in 2019, focusing on businesses with sustainable growth potential and divesting and/or restructuring de-prioritised assets and businesses to release capital and redeploy to the prioritised businesses.

The Transaction is expected to be completed by end-March 2020, subject to customary closing conditions. On completion, Far East Agri will cease to be an associated company of Olam.  Olam will book a post-tax capital gain of approximately USD 37.5 million to USD 40.0 million on completion of this Transaction.

Assuming that the Transaction had been completed on 31 December 2019 (FY 2019), the effect of the transaction on the net tangible assets (NTA) per share of Olam together with its subsidiaries (Group) and the earnings per share (EPS), based on the recently announced unaudited results for the full year of the Group for FY 2019, is as follows:

	Before Transaction	After Transaction
NTA (SGD’000)	6,431,988	6,484,142
Number of shares(1)	3,271,018,657	3,271,018,657
NTA per share (SGD)	196.64	198.23

(1) Based on the total number of shares as at the date of announcement

	Before Transaction	After Transaction
Net profit attributable to ordinary shareholders of Olam after capital securities distribution (SGD’000)	509,103	561,257
Number of shares(2)	3,186,355,548	3,186,355,548
Basic EPS share (cents)	15.98	17.61

(2) Based on the weighted average number of shares applicable to basic EPS