Olam Food Ingredients (OFI) — a wholly-owned subsidiary of the Singapore Stock Exchange (SGX)-listed commodity trader Olam Group — has obtained a multi-tranche, sustainability-linked debt facility of $1.975 billion from 19 banks across Australia, Canada, Europe, Japan, Singapore, the Middle East, and the US.
The loan will be initially guaranteed by the Olam Group, and will eventually be transferred to OFI after its initial public offering (IPO) and demerger from the Olam Group, according to a regulatory filing on Wednesday.
The debt comprises a two- and three-year Revolving Credit Facility as well as a three-year term loan. The interest margin is linked to the achievement of sustainability targets across various ESG (Environmental, Social and Governance) areas.
Proceeds from the loan will go towards refinancing OFI’s existing loans and general corporate purposes.
The nineteen participating banks have been categorised into four tiers. They include DBS and Mizhou Bank as joint sustainability coordinators and senior mandated lead arrangers. Standard Chartered and BNP Paribas are among the transaction’s senior mandated lead arrangers, while BNS Asia is the sole mandated lead arranger.
OFI was created in early 2020 following a re-organisation within Olam International Limited (now Olam Group) to unlock and maximise its long-term value. The company offers sustainable, natural, value-added food products and ingredients such as cocoa, coffee, dairy, nuts, and spices.
Meanwhile, parent Olam Group’s food and agri-business has a value chain spanning over 60 countries. Its network includes farming, processing and distribution operations.