Asia-Pacific News

Olam secures $1B in new loans to refinance debt

Neelabh Chaturvedi
A picture shows an aerial view of oil palm fields of international agro-food company Olam, in Kango, central Gabon, on May 22, 2014
Xavier Bourgois | AFP | Getty Images

Agri-trader Olam International has secured $1 billion in funding to refinance existing debt, just a couple of months after Mitsubishi Corp snagged a 20 percent stake in the company.

Olam said the new revolving credit and term loan facility will comprise an $850 million 364-day revolving credit facility and a $150 million 5-year term loan.

Singapore state investor Temasek Holdings owns 51.4 percent of Olam.

Why Mitsubishi took a stake in troubled Olam
Why Mitsubishi took a stake in troubled Olam

Olam International said the proceeds would be used to refinance existing debt, meet working capital requirements and cover general corporate funding needs.

"This refinancing is part of our proactive capital management strategy of diversifying our debt portfolio and achieving an optimum mix of tenor and overall borrowing cost," A. Shekhar, executive director of finance and business development at Olam, said in a statement.

Read More Mitsubishi to buy at least 10% of Olam

The latest fund-raising exercise, coming on the heels of the Mitsubishi investment, should allay concerns over Olam, which was rocked by research reports from short-seller Muddy Waters in 2012 that questioned Olam's accounting practices.

Since then, Olam has outlined a plan to improve the cash it generates from operations and reduce the complexity of its sprawling business that includes everything from dairy to edible nuts and fertilizers.