Singapore based food and agri-business Olam International 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 $82.5 million and $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 US$37.5 million - US$40.0 million on completion of this Transaction.