Singapore-based Olam Group has secured a US$625 million Shariah-compliant financing facility from a diversified group of global investors for its food, feed and fibre operating group, Olam Agri.

The facility is initially guaranteed by Olam Group, which will transfer to Olam Agri after the latter’s planned initial public offering and demerger.  Proceeds from the facility will be applied towards general corporate purposes.

Olam Agri subsidiaries Olam Global Agri and Olam Global Agri Treasury act as purchasers of the facility with a tenor of three years. Investors include those from the United Arab Emirates, Malaysia, Singapore and Hong Kong. 

Abu Dhabi Commercial Bank, Emirates NBD Bank, and First Abu Dhabi Bank ( FAB ) are the senior mandated lead arrangers for the facility, while Citibank, Crédit Agricole Corporate and Investment Bank, HSBC Amanah, Mizuho Bank, MUFG Bank ( Malaysia ), and Standard Chartered Bank are the mandated lead arrangers.

Emirates NBD Capital and Abu Dhabi Commercial Bank are the global Shariah co-ordinators, while Emirates Islamic Bank is lead arranger and FAB is the investment agent.

“This landmark commodity Murabaha financing further diversifies Olam Agri’s funding mix with access to a new investor pool which provides financing on the basis of Shariah principles,” says N Muthukumar, chief financial officer of Olam Group and chief executive officer of operations at Olam Agri.

Last month Olam’s wholly owned subsidiary, Olam Food Ingredients, secured its first export credit agency ( ECA ) linked financing amounting to US$500 million.

Sumitomo Mitsui Banking Corporation ( SMBC ) acted as a mandated lead arranger and bookrunner and Citibank also acted as a mandated lead arranger for the facility. SMBC was also appointed as coordinator and facility agent.