Olam Food Ingredients

OLAM POSTSPONES OFI PUBLIC LISTING

Shares of Singapore-based Olam fell 6% on the news that it was postponing the planned IPO of Olam Food Ingredients (OFI), which would have raised it up to £2bn or $2.64bn.

It now does not anticipate its initial public offering to take place in the second quarter, as previously expected, due to the current market conditions. Although OFI released a statement saying “We remain committed to pursuing a public listing of the business.”

The market conditions matter because the stock is typically underwritten by a bank that will sell the shares to its network of investors. If investors are staying out of the market, then the price might need to be adjusted to attract them, but this may not raise the amount of funds the business initially envisaged.

We remain committed to pursuing a public listing of the business.

Statement from OFI

The geopolitical situation is creating a lot of uncertainty under which investors will stay out of the market or flock to ‘safe’ assets, like gold or, currently, commodities.

This is clearly not positive but not unexpected given that Russia and Ukraine are among the largest global wheat producers, besides other products.

Justin Tang, head of Asian research at United First Partners.

The delay will not be welcome to the London Stock Exchange, which has been losing market share to other stock exchanges globally. This IPO would have been the largest share issue in several years.

Author

  • Nick 2017 500X500 1

    organisation:

    Nick Baskett is the editor in Chief at Bartalks. He holds a diploma from the Financial Times as a Non Executive Director and works as a consultant across multiple industries. Nick has owned multiple businesses, including an award-winning restaurant and coffee shop in North Macedonia.

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