Agri-food giant Olam Group does not expect the dual initial public offering (IPO) of its agricultural unit, Olam Agri, in Singapore and Saudi Arabia to be completed in the first half of this year as originally planned, it said on Tuesday.
Shares of the Singapore-based commodity trader fell 6.9% on Tuesday afternoon trade after the announcement.
The dual listing of Olam Agri, which sources had said could raise up to $1 billion, will be the first such dual IPO in the world if completed.
It would also make Olam Agri the first company to list in both countries and the first non-Gulf Cooperation Council incorporated business to list in Saudi Arabia.
Olam said in a statement that “all the necessary regulatory approvals required to launch this transaction are yet to be obtained.”
Olam said a decision on the timing of the dual IPO is subject to factors that include regulatory approvals from Singapore and Saudi Arabia and prevailing market conditions.
It added that it will continue to seek the dual listing “at the next practical window”. It did not provide an approximate time frame and said that there is no assurance that it will materialise.
The listing delay comes as regional IPO markets are still struggling. Last Thursday, China’s Horizon Construction Development 9930.HKlost about a third of its value on its Hong Kong IPO debut, after raising $210.2 million as the Asian financial hub’s second biggest listing this year.
Olam’s plan to list Olam Agri comes after it sold a 35.4% stake in the 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 deal valued Olam Agri at an equity valuation of $3.5 billion, Olam has said.
Besides Olam Agri, Olam has plans to list its other unit, Olam Food Ingredients, as part of a business overhaul flagged three years ago. The listing will take place after Olam Agri’s IPO, Sunny Verghese, Olam’s co-founder and Group CEO, told a news conference in January.
Olam is one of the world’s biggest agricultural commodity traders. It counts Singapore state investor Temasek Holdings TEM.UL as its largest shareholder with a 51% stake, followed by Japanese trading house Mitsubishi Corp 8058.T with 14.4%, Refinitiv data showed.
Reuters