Olam to divest timber assets in Gabon

Source：Olam International Limted Release Date：2014-01-27 342

Food & Beverage

The company sells part of its timber assets in Gabon to Chinese investors for US$18.0 million

Global integrated supply chain manager and processor of agricultural products and food ingredients, Olam International Limited said it has entered into an agreement with a consortium of Chinese investors to sell part of its forestry and saw milling assets in Gabon for a gross consideration of US$18.0 million. The transaction closes by the end of FY2014.

According to the company, it will sell two saw mills in the Makokou region of Gabon, 2.5 hectares of land in the Special Economic Zone (SEZ) at Nkok, Gabon and associated forestry concessions. This will result in a one-off loss of $4.5 million on the sale of assets.

Olam expects a one-time restructuring charge of US$6.5 million. It said the sale will generate annualised manufacturing and overhead cost savings of about $13.5 million from FY2015, reduce the fixed capital invested in the business by $22.5 million and release $20.0 million of average working capital invested in this business.

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