Olam Group Limited (VC2) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I'm Hung Hoeng of Olam Group Investor Relations. It is my pleasure today to welcome all of you here, both in person gathered here in this room as well as those of you who have dialed into the live webcast of our event today. And today, we are assembled here for a management presentation of a key milestone development in Olam Group. This morning, we announced a transformative deal that represents a significant value realization for Olam Group, the sale of the remaining 64.57% stake in Olam Agri to SALIC, which marks another key milestone in Olam's reorganization journey, which began in 2020. We are pleased to have the company of our leaders here at Olam Group and Olam Agri, Co-Founder and Group CEO, Sunny Verghese, to my right, and Group CFO, N. Muthukumar, to my extreme right, to tell you more about this transaction and to answer your questions. And before we start, it's my responsibility to bring to your attention the cautionary note on forward-looking statements here on this slide, and you can read it on your mobile device if you scan the QR code that's provided to you or if you download the presentation on the webcast. I understand that this is in fine print, so we encourage you to read it on your device. And moving on to the agenda, Sunny will take us through the presentation today, the context and background, an overview of the transaction, the strategic rationale, the timeline, the completion timeline and next steps and also summarize the key take-home messages. So thereafter, we'll open the floor for questions, and both Sunny and Muthu will answer your questions. And thank you for your patience, and I'll hand over to Sunny now.

Thank you, Hung Hoeng. Good afternoon to you all. Welcome. As Hung Hoeng has mentioned, I will have a short presentation. We'll take about 15, 20 minutes. And then, we will allocate most of the time for your questions and clarifications. Muthu and I will be happy to take your questions after the brief presentation. We have only 7 slides, so be patient with us, we'll get through that fast, and then, we will open it up for questions. We will also be seeing you again on Friday for the full year results briefing. So all the questions that you have about the full year results, we will take it on Friday, and we can do more justice to that part. So today just focus on this announcement that we made this morning. So let me start with how we got here. So all of you have been part of our transformation journey or our reorganization journey since we launched the reorganization in January of 2020. So what have we done so far and where are we in that journey? So firstly, in January of 2020, we announced the reorganization plan that we will like to split Olam into 3 distinct operating groups; OFI, Olam Agri and the remaining Olam Group. So in the first 2 years, January 2020 to January 2022, we had completed the carve out of these 3 entities from the Olam Group. And we had also completed the separation of these 3 entities from the Olam Group. And that's how OFI was born, headquartered now in London. And Olam Agri and the remaining Olam Group was created. Then, in March of 2022, we announced the transaction to sell a 35.4% stake in Olam Agri to SALIC. That deal completed in December of 2022, and that was the first step in our reorganization journey where Olam Agri was carved out, and we brought in a strategic long-term investor in SALIC at 35.4%. SALIC then became Olam Agri's largest shareholder, followed by Temasek at 33%. Then we also entered into a long-term strategic supply and cooperation agreement with SALIC, which has been implemented for the last 2 years and is ongoing. And that met and exceeded the expectations that we had of the long-term strategic cooperation with this new shareholder SALIC. And then today, we announced that we are selling the balance 64.5% stake that was remaining in OGL to SALIC in 2 tranches. And, therefore, at the end of the 2 tranches exercise, we would have sold 100% of the stake -- equity stake in Olam Agri to SALIC eventually. So that is where we are. The transaction that we announced today is in 2 tranches. In the first tranche, which we have announced, we are selling 44.6% stake in addition to the 35.4% stake that we had already sold in December of 2022 to SALIC, which will take them at the end of this exercise of Tranche 1 to own 80.01% of Olam Agri with the remaining 19.99% stake continuing to be held by the minority shareholders. The remaining OGL group will own 19.99%. But we have also entered into a put agreement, irrevocable, unconditional put agreement to sell the balance 19.99% stake on the third anniversary of the completion of Tranche 1. So 3 years from the completion of Tranche 1, we have irrevocable and unconditional put to sell the balance 19.99% back to SALIC. At the end of Tranche 2, we would have sold effectively 100% of the interest in Olam Agri to then the 100% shareholder SALIC. So that is the structure of the transaction. One other thing that needs to be mentioned here is that SALIC has also been granted a call option to buy the 19.99% stake that is left anytime between now and 3 years. So it's an American style call option that they have to be able to call the balance 19.99% anytime within the 3 years starting from the completion of the transaction. So that is how we have got to the stage where we are discussing today this. So the considerations in terms of the valuation is for the 44.58% stake. We will receive an additional $1.78 billion, which is about SGD 2.35 billion at an implied 100% equity valuation for Olam Agri of $4 billion, which is about SGD 5.28 billion. As you know, Olam's market cap as of Friday was about SGD 4.3 billion, so this is quite -- Sing dollars, so the $1.78 billion. So I'm flipping between Sing and U.S. because we are listed in Sing and our market cap is expressed in Sing, just to give you a comparison in a sense of proportionality. And then upon completion of Tranche 1, SALIC will, therefore, as I said, own 80.01% and Olam Group will own the balance 19.99%. They have the put option, which I mentioned to you. SALIC will also upon completion of the sale of Tranche 1 have a call option, which I mentioned to you. And the dividend payout, which is a permitted leakage for the second half of 2024, which will be paid out or approved by the Board and paid out after -- at the AGM -- after the AGM approval. We have a permitted leakage of paying 50% of the earnings of Olam Agri as its contribution to the share of ODL dividends up to a maximum of USD 110 million. That's a permitted leakage, which is part of this transaction. And then after the exercise and completion of the put and call option, SALIC will own, as I said, 100% of Olam Agri. This is an important and key milestone step in the reorganization journey in the sale of eventually 100% of Olam Agri to the new strategic shareholder SALIC. Moving on, yes, so what does this mean in terms of a quick summary of the valuation? As I said, $4 billion is the current implied valuation. This valuation will change based on the closing adjustments. There is a certain equity kicker that is provided by SALIC to Olam, which is expressed as per day what we will get in terms of that equity kicker. So that is roughly to the tune of $430-odd million a day from 1st of June to whenever the transaction completes based on the number of days it takes for the transaction to complete. So it's $4 billion valuation -- base valuation plus closing adjustments, plus before we exercise a put interest of 6%. That is what we define as valuation at completion. But assuming the base valuation of $4 billion, that $4 billion is firstly a 14% premium to the earlier transaction completed in December 2022, where we had valued Olam Agri at $3.5 billion. So on the $3.5 billion at the base valuation now of $4 billion, that will be a 14% premium to that last transaction that we did with SALIC. It will also be 23% premium to the market capitalization of Olam Group. Olam Group, as you know, consists of Ola Agri, OFI, as well as the remaining Olam Group. So it is -- this valuation of $4 billion for Olam Agri -- of 100% of Olam Agri is at a premium of 23% to the whole market capitalization of the Olam Group, including OFI and the remaining Olam Group. This also translates to about 3.47x book value of Olam Agri at the end of 2023. This will translate to about 3.47x, which is an attractive valuation. And finally, we will get a capital gain of USD 1.83 billion once this transaction goes through because we are selling a majority. When we sold 35.4%, the capital gain didn't flow through the P&L, accreted directly to our equity and reserves. But now that we are selling a majority stake, we will be flowing this capital gain of this additional USD 1.83 billion or SGD 2.48 billion -- SGD 2.43 billion into -- through the P&L and accrete to our reserves. So this is just a summary of the valuation highlights and the attractiveness of the valuation that we have obtained in this transaction. We will -- at the completion of both Tranche 1 sale of this 44.58%, plus the original sale of 35.4%, we would have sold 80.01%. We would have received total gross proceeds of $3.87 billion. For this balance stake that we are selling now, 64.4% -- 64.6%, we will get an incremental proceeds into the company of $2.58 billion. This will allow us to sell 100% interest in Olam Agri, and SALIC will be 100% shareholder at the end of Tranche 2. And we would have raised total gross proceeds between the 2022 sale and this announcement today of roughly USD 3.87 billion/SGD 5.11 billion. And this will give us a total cumulative gain between that first transaction and today's transaction of USD 2.72 billion or a capital gain of USD 3.59 billion (sic) [ SGD 3.59 billion ] for cumulatively all these phases put together. The OGL Board, as we speak, is discussing the use of these proceeds, and they are taking into consideration the capital requirements of the remaining Olam Group, the growing OFI business and will also consider a one-time special dividend payment at the end of this assessment exercise. And when that is done, we will announce how the use of proceeds will be for the transactions that we are completing, including Tranche 1 and Tranche 2 as well. So I think the strategic rationale has not changed from when we did the transaction in 2022 of selling the 35.4% stake. All of those rationales will continue. But as a 100% shareholder, it becomes far more easier to prosecute our long-term vision for the Olam Agri business. So it will continue to strengthen our position as a differentiated and global agri business. We have explained in the past our various points of differentiation. We have achieved over the years that we have carved out Olam Agri and made it a separate company a very high track record of performance and growth across cycles and across market volatility. And we believe that our position in the way we have differentiated ourselves as being a truly independent leader, being an asset-light business in the origination side, having low overhead cost per tonne, all of that has played into our hands as we focus on the high-growth emerging markets in Asia and Africa for the major food staples in food -- in grains, in oilseeds and in related sectors. We have become a fully sustainable and integrated food security player and a food industry leader, which is the mission and vision of SALIC to be regional as well as a global food security player and company. And our vision matches with the direction of travel that SALIC has in mind for the SALIC business as well. It will also help us get SALIC to implement more effectively their domestic food security play as well as building a regional ecosystem for having a preeminent food security business based out of SALIC. So Olam will play a critical part in that vision and mandate for SALIC. The completion of the Tranche 1 of this phase -- of this transaction is conditional upon a regulatory approvals from the jurisdictions where we need FDI and antitrust approvals. We will have shareholder approval requirements of the Olam Group and Olam Agri shareholders, which -- Olam Group shareholders. And subject to us meeting all these customary closing conditions, regulatory approvals and the shareholder approval, we will be able to hopefully complete this transaction in Q4 of 2025. It took us roughly 9 months last time to complete all this. Having done it once, we are a little bit more prepared this time around. But global regulatory conditions have also changed. Our estimate is that we should be able to complete this transaction by Q4, and we will work towards that. We will continue to focus on all the other strategic options, including potentially IPOs, et cetera, particularly for OFI, and we will now stay focused on executing the remaining steps of the overall reorganization journey that we embarked on since January of 2020. So this is what we have so far spoken about, the sale of Olam Agri to SALIC, completes one of the very key initiatives and milestones in our reorganization plan and journey and the valuation impact and significance of this in terms of the premium to the last transaction with SALIC, premium to our current market capitalization of the whole Olam Group. And also a premium in terms of market to book, how relatively this compares with the rest of the industry. We will raise $2.58 billion of proceeds in transaction -- Tranche 1 and Tranche 2 in addition to the gain that we recorded when we sold the first 35.4% stake in 2022. And as I said, the Board is taking consideration of the growth requirements of OFI, Olam Group and the rightsizing the capital structure of these entities. And based on a consideration of the capital requirements, we will determine the final use of proceeds. And as we complete that exercise, we will engage with the shareholders again to be clearer about the use of proceeds. As you know, we will be having an EGM to consider this transaction sometime in April. And by then, we would have made the determinations on the specific use of these proceeds. With that, we will be happy now to take this up for Q&A. So Muthu will help us in dealing with your questions. So the floor is open.

Thank you, Sunny. I would like to reiterate that this is a forum for the announcement of the sale of Olam Agri, so we will prioritize questions on this announcement today. [Operator Instructions]

My name is [ Gireesh ], and I'm from SMBC. Just one question. I mean I think in relation to this transaction is split into Tranche 1 and Tranche 2, I mean, why not to just complete it 100% when the intention is to eventually transfer 100%? So why to split into tranches?

Yes, that's a question better addressed with SALIC and PIF because they are the acquiring shareholders. And based on their constraints, they have decided that they will do this in 2 tranches. But the -- there's no uncertainty or doubt about the second tranche. So whatever their considerations and limitations are at this point in time, they would prefer to do this in 2 tranches. For the Olam Group shareholders, what we had to ensure was there is absolutely no uncertainty on the remaining sale of the balance 19.99%. So we have, therefore, secured this irrevocable and unconditional put that will ensure that we will be able to sell the balance 19.99% without any risk to the valuation. So the valuation at which the put can be exercised will have to be minimum the investment consideration that is paid here plus all the closing adjustments, plus the 6% interest per annum, compounded. So we now have for the 19.99% an additional consideration of $800 million that we will receive when that put of 19.99% is exercised. And that will go to roughly at the end of -- because it's a European style put, we can only exercise on the third anniversary. So the compounded closing valuation on completion will be almost about $1 billion additional. So as far as our shareholders are concerned, we have secured that. We have met the requirements of the incoming majority 100% shareholder, and that's the agreement that we have entered into.

I am [ Jesse ] from ANZ. 2 questions for me. One, in terms of regulatory approval, do we sort of foresee that this is going to be sort of a tougher regulatory approval? Or could it be a sort of straightforward one? Question two is really on how would Olam Agri be looking like post acquisition in terms of management structure. And where does it sit in terms of that sort of SALIC group? And the third question -- the third part of that is really on how do we -- do we know what would that sort of balance sheet structure of Olam Agri be looking like?

I'll ask Muthu to take questions 1 and 3, and I'll address the question two on management structure.

Yes. Thank you. So good afternoon to you all. First of all, let me thank for all of you to come here on short notice and attend this briefing. I take this opportunity to thank all our stakeholders in terms of our financial advisers, Rothschild, HSBC, Citi, as well as our legal advisers, Wong P, and our auditors, Ernst & Young, who have worked tirelessly through, probably, 18 months in ensuring that we are discussing what is the deal today. So I want to take this opportunity to thank them all and congratulate them for their effort. Secondly, to address your specific question on regulatory approvals. So we have had one round of regulatory approvals when we did between March and December '22. So we announced in March 2022, and we completed in December 2022. And we had roughly similar regulatory approvals that we had to do. A couple of them were added because we have expanded our businesses. So 20 regulatory approvals, in essence, are required for this transaction. Basis our past experience, we believe that we will be more efficient and notwithstanding the geopolitical conditions that we have in terms of whatever we have. Because the fundamental difference between other transactions that we have seen, here we have a strategic financial investor and an operator. So unlike other transactions where regulatory approvals become tricky because there is an operator acquiring an operator. So we believe, we will be more efficient. And as Sunny said, we are hopeful that we will be in a position to efficiently and effectively apply for regulatory approvals, and more importantly, conclude before end of this year.

Third question, you can answer that. I'll come back to the second question. Third question?

The question is on the balance sheet.

On the balance sheet.

Unfortunately, we are in embargo, I can't comment as such.

Okay. So on the second question that you had it was on the management structure. We don't envisage much changes to the governance and the management structure. In the 2 documents that we have signed, which is the sales and purchase agreement and the shareholder agreement, we clearly intend along with the discussions with SALIC to maintain the independent nature of the Board. So we had already created an independent governance for Olam Agri by setting up an IPO-ready independent Board already. So we had -- and we would -- in the binding agreements that we're entering into, we will have the independent nature of the Board to govern the new Olam Agri with 100% SALIC ownership. That will continue to be the case because we are intending or SALIC is intending to eventually list this company, and they would like, therefore, for us to be prepared and ready for a listing. And therefore, they'd like this Board to be independent in its nature. Of course, there will be some adjustments to the Board, but we will essentially maintain the IPO-ready independent nature of the Olam Agri Board going forward. As far as management structures are concerned, et cetera, we will announce in due course, but they have bought this company and paid a premium to acquire this company because they believe that the leadership and management team for this company is the right one, and therefore, they would like to continue with that. But there will be always some minor changes at the margins to make us more fit for the future and ready for the future. So that will happen in due course. But essentially, the leadership and management team as well as the governance structure, we don't see much changes happening to either of these 2 things.

I'm Chetan Khulbe from ING. Could you also talk a little bit about whether there could be any change in strategy given that, I mean, you are Olam Agri, the global player at the moment, SALIC's mandate might be slightly different? So have there been any discussions on that? And what could we expect on that side of it?

Yes. So we've had extensive discussions, but the premise for this deal is that they like what Olam Agri is doing. And the fact that it has taken us a 3-stage process, first, the transaction they did in March of '22, which was closed in December of '22, where they bought a 35.4% stake. This was thoroughly discussed, what is SALIC's vision and mission, what is Olam's purpose and Olam's vision and how do they dovetail. And then at the strategy level, portfolio strategy, competitive strategy and how we differentiate our business, this has all been discussed over many years, 3 years now. And therefore, there's quite a lot of clarity and alignment between what SALIC wants to achieve in its mandate and what it sees in Olam Agri in terms of its purpose and vision and its strategy. So there's a lot of -- so one thing you can refer to is that SALIC is mainly in food and feed, whereas Olam is in food and feed, but also in other agri industrial raw materials that we supply and some ag services that we are involved in. These are high-value businesses, high-growth businesses, very differentiated businesses, for example. So that would be one thing that is different from what SALIC is doing, but they're very, very keen on helping us stabilize and further profitably grow the business and create value. So in terms of the geographical footprint and focus, there's a lot of overlap and synergy in terms of where we want to grow using SALIC's capabilities, resources, access, and where we want to grow as Olam Agri based on our two 3-year, 6-year plan -- two 3-year cycle plans, 6-year plans that we have. There's a lot of agreement and meeting of minds on what we want to do. So here, I don't see us having to necessarily have a lot of tension between our portfolio, vision and strategy versus SALIC's existing portfolio, vision and strategy. And their future direction of travel dovetails and coincides with what we want to do. So that is a lot of alignment. What would happen with the SALIC transaction is that we will have more aspiration and ambition because this is a pure-play food security company and that's exactly in the soul and center of what Olam Agri wants to do. As a result, we will embed more ambition and aspiration on what this combination can do for us. There are a lot of assets in the SALIC portfolio, which might fit in very well by injecting it in Olam. This is for the future Boards. It is for the Boards in the future to decide. But more ambition, aspiration; more resources; more ability to take risk; more access to getting a lot of government support, so SALIC's relationships in Africa, in the Black Sea and in many parts, which are strategic and important for our future. I think what we have seen in the last 2 years in the strategic partnership where they only own 35.4% stake, they were willing to get the whole of government to come to bear on furthering our interest where it was appropriate. So we would see that their capacity to deliver the whole of the government to catalyze our growth and catalyze our future potential will make this very synergistic. So more synergies, more resources, more ambition and aspiration, a lot of strategic partnerships within their existing portfolio and some of the other things that they're planning to do to go for in the future, that is what is transformation and exciting about this cooperation.

This is Thomas from Bank of China. So I have a question. Since SALIC is taking all the shares from Olam, taking the Olam Agri, have any discussion like the name will be retained or there's a change of name of the company? If we will keep the name of Olam Agri, then what is the relationship between Olam Group and this new company fully owned by SALIC? And what is the relationship logic behind it?

Muthu, do you want to try?

Let me attempt that. So, as you know, we did a reorganization in 2020, right? And the whole purpose of the reorganization, however, painful it was and expensive it was, it was to eliminate value for the shareholders. And as you know, as part of it, apart from OFI and the remaining Olam Group, we had Olam Agri. And you would see that the Olam Agri logo is the same as the Olam Group logo. And our intention is to continue the legacy of what we have done in the last 36 years, starting in 1989. And what we believe currently is that SALIC will definitely benefit from the franchise that we have globally as Olam. And I cannot talk for them in terms of what it will be in the future, but I truly believe that this franchise is something that they will definitely benefit from, and this will survive and prosper.

So I think your specific question was about whether the name will change. At this point in time, there is no indication that either of us want any change in the name because there is a lot of brand and franchise value created in the Olam Agri name. And at this point in time, that is what we envisage will continue going forward in the future. In terms of the role and involvement of the minority shareholders with the sale of this 80.01% now, the remaining minority shareholders of 19.99%, but with limited minority rights because we are secured for our existing shareholders any downside because we've got an irrevocable and unconditional put. So there's no uncertainty for the minority shareholders that at the end of the put period, 3 years, we will get -- we'll have no downside in the valuation, we'll be able to protect that valuation. As a result of that and having also on top of that a fairly independent Board, we feel that it is not necessary for the minority shareholders to have all the traditional minority protection and rights because we already secured ourselves. So effectively, this company, which will be owned now in the first tranche 80.01% by SALIC, SALIC will effectively have control on this company. And as minorities, we will not have that much of a say in this company going forward. So that was, I think, your question, what will happen to them? Of course, in 3 years' time, when we exercise the put or earlier when they exercise the call because they can exercise the call any time over the next 3 years, we can exercise the put only at the end of 3 years, as soon as the put/call structure is complete, they will obviously own 100% -- SALIC will own 100%.

Are there any management lock in options as part of the deal?

Yes. So the management for SALIC, the management team is extremely important part of the transaction. So whatever SALIC needs to do to make sure that the management continues and remains motivated and inspired to execute their long-term vision is put in place.

[indiscernible]

That's got nothing to do with the existing shareholders or the existing things. So it's what the new shareholders are going to do for the new management -- for the management team going over. So that is entirely a SALIC matter, it is not a matter for Olam shareholders.

This is Bastavee from DBS Bank. First of all, congratulations on this milestone transaction. I wanted to clarify in terms of the head office as well as other key functions such as treasury, et cetera, will it continue to remain in Singapore? Or is there any discussion to move it to...

Yes. As of now, it will continue in Singapore. But we will evaluate that as we go along and we go towards an IPO, et cetera, and the venue of the IPO, where it is. We will make adjustments along the way, but the principle here is not that everything should be Saudized today or tomorrow. We will have our people in the locations where they will best serve the interest of the business. So our focal condition is really about what is in the best long-term interest of Olam Agri as a global business to fulfill and execute on the mandate and vision of SALIC, which has a global international mandate and domestic mandate and a regional mandate. So we will evaluate this as we go along. And as we get closer to the IPO, et cetera, we will get a little bit more clarity as to which functions need to stay in Singapore, which functions might migrate to other parts of the world, including Saudi. All this is open for discussion going forward. And the Board of the company will make those determinations at the appropriate time. But there's no orthodoxy, no condition that everything has to move to Saudi and everybody has to move to Saudi. We don't have that kind of conditions at this point.

It's [ Alfie ] from [ Bloomberg News ]. So when do you expect, based on your conversation with SALIC, that Olam Agri would list, I mean, for the IPO in Saudi Arabia? And as also said, the group will now focus on the OFI IPO, so any updates you can provide for us, please?

So on the Olam Agri, IPO is too early. The ink is not even dried on the announcement. So once the announcement is done and the Board starts charting the course in discussions with the majority shareholders and stakeholders, a determination will be made when to list. The consideration that could influence the timing on the listing would include what is the new composition of Olam Agri. The existing composition is all the businesses that we are bringing together, which comprise today's Olam Agri. The new Olam Agri will be potentially assets injected by SALIC from within its portfolio. It will also include what we are planning in terms of the growth of the new Olam Agri under SALIC's majority ownership. So all these 3 phases or 3 aspects of building the new Olam Agri, the existing Olam Agri, the assets and businesses that can be potentially injected from SALIC. And the growth that SALIC and Olam Agri is planning for the future, that will determine the timing of the IPO. So we might say we'll wait for some more time until we inject this or acquire that or do whatever it is. So I don't think we have a precise timeline, but the idea is that we want to list at the appropriate time and the earliest possible opportunity.

India.

Sorry?

India.

In?

In India.

In India. No, no.

No, no, no. Sorry, Saudi Arabia.

In Saudi Arabia. Saudi Arabia clearly is a major place that we will be looking at, but all those determinations have not been made. But yes, Saudi is a very attractive market to list. And if you are a 100% Saudi-owned company, we don't need all those regulatory approvals that we were struggling as a foreign company because no foreign companies can list in Saudi. And it was only GCC-registered, incorporated companies that were given permissions to list in Saudi. But now the Saudi Capital Markets Authority has issued a white paper on allowing foreign companies to list in Saudi. So that opens up that. But for us, it doesn't become very relevant because we'll be a Saudi company, and therefore, we need not be listing as a foreign company in Saudi. So those prospects are there when we definitely pursue that. Saudi is also a well-capitalized market. It's got a fairly substantial capitalization, substantial liquidity. The food and agri businesses -- many food and agri businesses are listed there. So it is definitely a leading candidate where we would like to consider an IPO. On your second question of OFI, we will discuss that in the full year results briefing, but IPO is one of the options on the cards, but they're also pursuing various strategic options that can prepare for the same objectives that we have set out as far as OFI is concerned. But a lot of the focus, now that Olam Agri is out of the way, will be on developing those strategic options for OFI and prosecuting those options and also rightsizing the balance sheet and everything else of Olam Agri, which will be one of the use of proceeds how we look at the capital requirements of the remaining Olam Group. The capital requirements of OFI, the growth CapEx that is required for both these businesses, a potential special dividend, all of these are factors that will be taken into account by the Board as they try and establish what would be the optimal use of the proceeds from the sale of Olam Agri to SALIC.

Just to be on record, there is nobody more than Sunny to say, we, whenever we talk about Olam. When Sunny talked about we in the context of Olam Agri, it is not about Olam Group, it was only about Olam Agri.

This is [ Mayuko ] from [ Nikkei ]. Firstly, can I confirm that the plan to be listed -- for Olam Agri to be listed on SGX is no longer there? Or is there a consideration or possibility?

It's all up to the new Olam Agri Board. The new Olam Agri Board will take stock of all of this and decide when to list, what is the ideal location for listing. So that's a determination that will be made in the future. But all these things that we talked about, about Saudi being a potential listing venue, Singapore can be on the listing venue. There are many global exchanges where the new Olam Agri could potentially be listed. But Saudi is a leading place where we will consider a listing.

The original plan of listing to Saudi and SGX...

The original plan is no longer relevant because the original shareholders are not there anymore.

Okay. And I believe you -- Olam Group needs the...

So I'm not saying that we will not consider Singapore. I don't want tomorrow's headlines that we are leaving Singapore and all that.

I believe Olam Group needs shareholders' approval for this plan. What is your -- have you been -- have you engaged shareholders already? And what is their reaction? Or what do you expect them to...

The shareholders are represented on the Board. As members of the Board, we have heard the views of the shareholders. And this is a Board-approved transaction. We can't announce this transaction without Board approval. The Board has representatives from our shareholders. And therefore, this is a determination that the Board has made. So we expect that the shareholders are aligned. But as we go to the EGM to seek specific approval from the shareholders, shareholders will express their views and vote in favor or against the transaction.

Lastly, about the $2.6 billion proceed, how to use it? You said you're going to engage your shareholders, but at this point of...

Not engage the shareholders. We'll be engaging the Board. The shareholders own the company, they elect a Board, and the Board will have a presentation of the shareholders. So the Board will make the determination.

At this point, in your words, what are the plans? What are the possibilities and the options?

I indicated the plans. There could be money going in to resize the Olam Group balance sheet. And, therefore, for example, paying some of the Olam Group's debt and making Olam Group more self-sustaining and sustainable. So some of the proceeds could be earmarked for that. Some of the proceeds could be earmarked for some capital requirements of the remaining OFI group. Some of the proceeds could be earmarked for paying out a special dividend. So there are multiple users that the Board will look at the business conditions and the performance of the businesses and the plans for the businesses and then will determine how much money should go to each of these buckets of potential use of funds. So our announcement and our presentations and our Chapter 10 announcements, et cetera, outlines this. So there is a couple of paragraphs which explains the potential use of funds and explains that we are -- the Board is evaluating how the funds should be allocated between these multiple competing views.

Since there's a pause here in questions from the floor, I will take a few questions from the online group. 2 questions so far. I think the first one is in regards to if Muthu can spend a minute or 2 just to talk about the accounting treatment for the balance 19.99%. That's number one. The second question is one of the factors to consider for the use of proceeds is about the capital structure of OGL and OFI, what would be the ideal or optimal capital structure you would like to see for these entities?

So the first question in terms of the Tranche 2, 19.99%, as Sunny had highlighted in the presentation, it is an irrevocable, ironclad put that Olam Group Limited can exercise at the end of completion of 3 years post completion of this transaction. So that effectively determines that it is something where there is no downside from an equity perspective for Olam Group Limited. And in a sense, depending on auditor's opinion, whether it is treated as an associate or it is treated as an equity investment, we would be in a position to recognize a full profit or capital gains transaction, including step up from the current 35.43% to 80.01% to 19.99%. So we do not see any difference from an accounting treatment of being treated as an associate or an equity investment post completion of this first Tranche 1 transaction, upfront. So on the second question on capital structure, I think Sunny has already clearly detailed in terms of how do we look at use of proceeds from there and rightsizing the structure of Olam Group Limited in terms of 3 buckets, and I think I don't have to repeat that.

There are some questions that have come online about the target for gearing for Olam Group Limited, but we understand that we're going to report results at the end of this week, so we'll save that question for that day. Are there other questions from the floor? If not, we would like to thank you for your questions and your participation. And if Sunny and Muthu have any closing remarks before we close the meeting?

Once again, thank you all for coming in -- coming at short notice, ensuring your support. So I didn't take an opportunity to thank our internal teams in Olam, who have worked tirelessly to ensure that we have this outcome, and I take this opportunity to sincerely thank all our internal teams for taking it here. So I don't want to name somebody or anybody because then it will become that I may miss out somebody, but really, really appreciate all the internal teams that have really worked tirelessly to get this great outcome. We are truly excited about the possibility that what Olam Agri transaction can illuminate value, this truly demonstrates the reorganization decision that we took in 2020. There have been some hiccups on the way, but this kind of, again, defines what we wanted to. But more importantly, this is not the end. It is just the beginning. The true story is OFI, and look forward to that and then keep interest in ensuring that Olam Group script is something that you look at and look forward to and OFI is the real story. Thank you.

I think 1 or 2 things that you must remember is, first, this transaction, both that was completed, the 35.4% sale in December of '22 and the sale of Tranche 1 here, which is an additional 44.5% plus the prospective sale of another 19.9%, which has been locked in, in the put/call structure is the concrete evidence of the fact that Project Manna reorganization plan is working. So this is the first demonstrable proof of the value unlock and the value creation. So that's the first milestone. That's the first thing that has been established. The second thing that we have to remember is that this is a transformative and milestone moment for Olam Agri albeit under a different ownership structure, but the future shareholders and the future of the Olam Agri looks very promising and bright in terms of the natural synergy between the vision and the plans of SALIC and the vision and plan and strategy of Olam Agri. So this is a transformative milestone moment on the future prospects of Olam Agri. And the third, having completed this first, but very important milestone and step for Olam Agri within the broader Olam Group reorganization journey, we can look forward to with confidence on the value creation potential of the other parts of Olam Group, as we execute the whole strategy and plan in terms of our reorganization objectives. So those are the 3 things where we want to leave with you. Thank you all for coming. And thanks, as Muthu said, to all the teams and stakeholders who have been involved, of course, something that this takes time and something like this takes a lot of effort and work from everybody concerned. So we would like to -- I would like to add my thanks and gratitude to both internal teams, external partners, who work with us in crafting a win-win transaction. This is not about win for Olam only. It is a win-win transaction for the incoming shareholders, the exiting shareholders and the management teams in terms of what this means to each of us. Thank you.

Thank you. See you on Friday.