GABON: Govt. increases stake in Olam palm and rubber joint ventures

Olam Palm Gabon (“OPG”) and Olam Rubber Gabon (“ORG”) are joint ventures between Olam and RoG, with Olam holding 70 % and 80 % equity stake respectively, and RoG holding the balance 30 % and 20 % respectively.

On completion of this transaction, Olam will own 60 % equity interest in both OPG and ORG joint ventures, with RoG holding the remaining 40 %.

RoG’s increase in stake in these two joint ventures is on account of the strategic importance of these projects to the Gabonese economy and in recognition of the achievement of key project milestones. Of particular significance to RoG is the generation of local employment in the rural areas and the potential to attract other industry participants and promote the country’s nascent palm and rubber industries.

For Olam, the transactions are in line with its strategic plan to unlock value by seeking strategic partners to co-share investments in capital intensive and long gestation projects. This is expected to release cash of approximately USD 30.0 million for Olam and will result in a gain of USD 14.5 million that will be credited to capital reserves.

With this investment, Olam does not anticipate further equity cash calls for completing Phase 1 of the project.

Some 2,019 hectares of rubber have been planted in Bitam as at end-February 2014 as part of the Phase 1 development of 28,000 hectares.

Source: olamonline.com website, Singapore; 28 Mar 2014
(Syed Rashid Ali, Karachi, Pakistan)
http://olamonline.com/news/republic-gabon-increases-stake-olam-palm-rubber-joint-ventures-us56-8m-additional-equity-investment/#sthash.NMClHqSk.dpbs