Olam Agri Singapore-Saudi dual listing could raise US$1bil, say sources

SINGAPORE, Jan 10 (Reuters): Olam Group plans to list its agricutural unit in Singapore and Saudi Arabia as early as the first half of this year in the first such dual listing, it said on Tuesday, with two sources telling Reuters it could raise up to US$1 billion.

The move comes after the Singapore-based commodity trader sold a 35.4% stake in its Olam Agri unit last year for $1.24 billion to Saudi Agricultural and Livestock Investment Co, a unit of Saudi's sovereign wealth fund Public Investment Fund.

"The decision takes into account the current global agri business trends which are very favourable and the rising food security concerns globally," Sunny Verghese, co-founder and Group CEO of Olam Group, told a news conference on Tuesday.

Olam, one of the world's biggest agricultural commodity traders, is listing Olam Agri and another unit Olam Food Ingredients as part of a business overhaul flagged three years ago, under which it created two new core operating businesses.

Singapore state investor Temasek Holdings owns 51% in Olam and Japanese trading house Mitsubishi Corp owns 14.4%.

The sources with direct knowledge of the IPO told Reuters it could raise between $500 million to $1 billion. The timing depends on when Olam is able to obtain complex regulatory approvals from Singapore and Saudi exchanges over the next several months.

"It's sufficient to say at this stage that it is a meaningful material IPO," Verghese said, adding that there was no final decision on the size of the IPO.

Olam said a primary listing in Singapore and a potential concurrent listing on the Saudi Exchange would make Olam Agri the first company to list on both exchanges and also the first non-Gulf Cooperation Council incorporated business to list in Saudi Arabia.

The Gulf states have been experiencing an IPO boom as the governments of Abu Dhabi, Dubai and Saudi Arabia push state-led listing programmes, riding high on oil prices and a comparative dearth of such offerings in other markets.

Olam said the IPO may involve a domestic and global sale of shares it holds in the unit as well as new Olam Agri shares. Last year's proposed multi-billion dollar IPO of Olam's food ingredients unit, which was subsequently deferred, will take place in London after Olam Agri's IPO, Verghese said.

Olam is working with Citi, DBS, HSBC and Morgan Stanley on the Olam Agri IPO, the sources said.

Rothschild & Co Singapore is Olam's independent financial adviser. - Reuters