Around $4 billion in value realisation has been announced: $3.4 billion from sale of Olam Agri, and another $0.7 billion or so from other divestments including its IT services unit Mindsprint.
If fully distributed as a special dividend, Saifee figures that Olam shareholders will enjoy a yield of 18%.
ofi, following the restructuring, should remain Olam's core business with around $1.1 billion in ebit but yet is valued by the market at only 2.0–2.5x EV/EBIT, versus 8–15x for global peers, which looks closer to distressed pricing than a fair value, says Saifee.
"Olam is becoming leaner, simpler and more cash-return focused. Temasek portfolio precedents suggest strategic restructuring can unlock value and drive rerating," says Saifee.
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Olam shares as at 11.26 am, gained 10.78% to trade at $1.13. It is up 18.95% year to date.
