By Aaditya GovindRao and Yantoultra Ngui
(Reuters) -Singapore-based food and agri-business conglomerate Olam Group said on Monday it would invest $500 million in its food ingredients unit and sell its other businesses and assets over time.
The commodity trader, which counts state investment company Temasek as its largest shareholder, also said it plans to allocate $2 billion to repay the debts of its remaining businesses and make them self-sustaining, before selling them.
Olam said the plan took into consideration the need to strengthen its balance sheet and the resilience of its operating groups “in the face of unprecedented macroeconomic uncertainties including tariffs”.
Commodities ranging from coffee to cocoa have experienced volatile prices alongside global markets amid the economic uncertainty triggered by U.S. President Donald Trump’s tariffs and policy orders.
“Agricultural commodities will be subject to tariffs between the countries concerned, and particularly between the U.S and China,” Olam’s co-founder and group CEO Sunny Verghese said in a briefing on Monday.
“But we believe that given the broad nature of production from multiple countries and the broad nature of consumption or demand also emanating from multiple countries, the impact on this, as we have seen in Trump 1.0 is quite minimal during this period.”
Olam will use the estimated $2.58 billion it receives from the sale of its stake in Olam Agri to Saudi Arabia’s agricultural and livestock investment firm SALIC, along with the proceeds from future divestments, for the restructuring.
The equity investment in Olam Food Ingredients will allow the company to explore options including a potential concurrent listing in Europe and in Singapore, it said.
Verghese said the timing of the listing is subject to the performance of Olam Food Ingredients and market conditions including the geopolitical situation.
Olam also plans to resume share buybacks and progressively distribute proceeds from the sale of its other assets to shareholders via special dividends.
In 2022, the company delayed a planned London listing for the food ingredients unit, citing market volatility as a result of the war in Ukraine.
Its remaining businesses include startups incubator Nupo Ventures, technology and business services firm Mindsprint and Olam Global Holdco, which owns the group’s non-core assets such as Olam Palm Gabon and Packaged Foods, its website showed.
Shares of Olam were up 7% at 91 Singapore cents per share on Monday midday, outperforming the 1.5% rise in the benchmark index.
(Reporting by Aaditya Govind Rao in Bengaluru and Yantoultra Ngui in Singapore; Editing by Tom Hoguu, Cynthia Osterman and Kate Mayberry)
