Olam secures US$525 million in sustainability KPI-linked loan
11 Sep 2019 --- Leading global agri-business, Olam International Ltd and its wholly-owned subsidiary, Olam Treasury Pte. Ltd. (OTPL), have secured a revolving credit facility aggregating US$525 million linked to meeting sustainability Key Performance Indicators (KPI). Olam has identified specific KPIs that are aligned with the three purpose outcomes of the company’s sustainability strategy. They are prosperous farmers and food systems, thriving communities, and the regeneration of the living world.
The facility consists of three tranches – a one-year revolving credit facility (RCF) of US$315 million, a two-year RCF of US$105 million and a three-year RCF of US$105 million.
According to Olam, the interest margin on the facility is linked with the achievement of the KPI improvement targets. The KPIs will be tracked and reported by Olam’s Corporate Responsibility & Sustainability team while Ernst & Young will independently assess the achievement scores by performing agreed upon procedures that have been approved by the banks.
“Sustainability has always been at the heart of Olam’s business. This facility, following last year’s US$500 million sustainability-linked loan, is another demonstration of how we are embedding sustainability into all aspects of our business and financing strategy,” says Olam’s Group Chief Operating Officer, A. Shekhar. “In turn, this will enable us to tackle the many challenges facing our sector and fulfill our purpose to re-imagine global agriculture and food systems.”
“We will continue to explore further opportunities in the green and sustainability financing space.”
Olam has appointed three banks - ANZ, BNS and Rabobank as senior mandated lead arrangers and six banks - Banco Bilbao Vizcaya Argentina, S.A., DBS Bank Ltd., Santander, Barclays Bank, HSBC and Standard Chartered Bank as mandated lead arrangers. Rabobank and HSBC have been appointed as the sustainability coordinator and facility agent respectively.
Proceeds from the facility will be applied towards the refinancing of existing loans of Olam and its subsidiaries.
Edited by Gaynor Selby
