Olam to sell remaining stake in sugar joint-venture for over $80m

Olam International has agreed to sell its remaining 50% stake in Indonesian sugar joint-venture Far East Agri to Mitr Phol Sugar Corporation for between $82.5 million and $85 million.

The deal sees Mitr Phol, Asia’s largest sugar producer, take full ownership of Far East Agri, following its initial $100 million investment for a 50% stake in the company in 2017.

Olam was left with the remaining 50% stake in Far East, which operates a sugar refinery in Central Java.

Prior to this initial deal, Far East Agri was a wholly-owned subsidiary of Olam.

The latest sale is in line with Olam’s six-year strategic plan, announced last year, in which the company aims to focus on businesses with sustainable growth potential while divesting other units.

As part of its 2019-2024 strategic plan, the Singaporean agri-business announced that it would offload its sugar, rubber, wood products and fertiliser businesses as well as other assets that no longer fit with its priorities.

Following closure of the deal, Far East Agri will cease to be an associated company of Olam.

The transaction is expected to be completed by end of March 2020, subject to customary closing conditions.

Earlier this year, Olam also announced a reorganisation of its structure into two operating groups focusing on food ingredients and global agri-business.