The current facility consists of three tranches – a one-year revolving sustainability-linked credit facility (SRCF) of US$50 million, a two-year SRCF of US$100 million, and a three-year SRCF of US$100 million.
The interest margin on the facility is linked to the achievement of sustainability KPI improvement targets and could be lower than comparable conventional loans, if those targets are met.
Olam has identified specific KPIs. They are: prosperous farmers and food systems, thriving communities, and regeneration of the living world.
The KPIs will be tracked and reported by the company’s corporate responsibility and sustainability (CSR) team, and assessed independently by Ernst & Young.
“This sustainability KPI linked facility is another step towards diversification of our funding mix by partnering with quality lenders who believe that Olam, as a leading force in the agricultural sector, is able to move the global sustainability agenda forward even in these challenging and uncertain times,” says N Muthukumar, the managing director and group CFO of Olam.
“This facility is the third sustainability-linked loan that Olam has executed in just the last two years with the support of our banking partners and goes to the heart of our purpose of Reimagining Global Agriculture and Food Systems,” he adds.
Shares in Olam closed 1 cent lower, or 0.7% down, at $1.45 on Thursday, prior to the announcement.
