Olam Agri Secures $625m Shariah-Compliant Financing

Olam Group
Olam Group

SINGAPORE – Olam Group Limited announced that its subsidiary, Olam Agri, has successfully secured a $625 million commodity Murabaha facility, marking a significant stride in diversifying its funding sources.

The facility, supported by a consortium of international investors from the United Arab Emirates, Malaysia, Singapore, and Hong Kong, underscores the global interest in Shariah-compliant financial instruments.

N Muthukumar, Group CFO of Olam Group and CEO of Operations at Olam Agri, highlighted the facility as a milestone in leveraging Islamic finance to broaden the company’s investor base.

“This landmark commodity Murabaha financing diversifies Olam Agri’s funding mix, offering access to new pools of capital while adhering to Shariah principles,” Muthukumar stated.

The financing arrangement involves Olam Agri subsidiaries, Olam Global Agri Pte. Ltd. and Olam Global Agri Treasury Pte. Ltd., with a tenure of three years. Initially backed by Olam Group, the guarantee will transition to Olam Agri following its anticipated initial public offering and demerger.

The funds raised are earmarked for general corporate purposes, reflecting the company’s strategic planning and operational needs.

The facility’s coordination and arrangement involved prominent financial institutions, including Emirates NBD Capital Limited and Abu Dhabi Commercial Bank as Global Shariah Coordinators.

Senior Mandated Lead Arrangers include Abu Dhabi Commercial Bank, Emirates NBD Bank, and First Abu Dhabi Bank, with additional support from an array of leading banks serving as Mandated Lead Arrangers.

Olam Agri stands as a leading agribusiness, boasting a comprehensive portfolio that spans food, feed, and fibre, with a significant presence in emerging markets.

In 2023 alone, Olam Agri traded 39.6 million metric tons across its diverse product range. The company is committed to transforming the agricultural sector towards sustainability, with a vision that aligns with feeding a growing global population responsibly.

Olam Group, the parent company, is a global leader in the food and agriculture sector, supplying a wide range of products to over 22,000 customers worldwide.

With operations across more than 60 countries, Olam reimagines global agriculture and food systems to address the critical challenge of meeting the needs of a rapidly increasing global population.

Based in Singapore, Olam is recognized for its sustainable practices and is a constituent of the FTSE4Good Index Series.