Olam to raise funds if Farming Systems bid successful

Olam claimed Farming Systems' operational target-setting was unrealistic and requires significant strategic changes.

Olam International will look to tap shareholders to address New Zealand Farming Systems Uruguay's funding shortfall if the Singapore-based company succeeds in its takeover bid.

The Singapore-listed food and ingredients conglomerate says Farming Systems was "unrealistic" in setting its operational targets, and needs significant changes to its strategy, according to the company's offer document. Farming Systems reliance on farm sales is "undesirable and unsustainable" as a source of short-term funding, Olam said.

"It is Olam's view that given NZFSU's performance history and financial situation, equity is a more appropriate source of funding as compared to additional debt," the document said.

"Olam believes that NZFSU may need to call on shareholders to support one or more equity capital raisings."
Olam is offering shareholders 55 cents apiece after it entered into an agreement to purchase PGG Wrightson's 11.5 per cent stake in Farming Systems subject to regulatory approval, valuing the target at $134 million.

The Singaporean company said the takeover will let it "realise significant cost advantages and the advantages of backward integration into dairy farming," in a statement lodged with the Singapore Exchange. "The company believes that running such a business in Uruguay, as opposed to certain other countries would be relatively more cost effective."

View the full story in New Zealand Herald.

If you've been wondering whether SBR could work for your company — yes, probably.

A lot of the companies we partner with started as readers. They'd been following our coverage for a while, saw their own customers and competitors in it, and eventually asked the obvious question: could we do something with you? The answer is usually yes. The shape of it depends on what you're trying to do.

The options are broader than most people assume — thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. Some partners use one channel; most use a mix. We figure out the right combination by starting with your brief, not with our rate card.

So if the question has been on your mind, here's the easy way to ask it.

We'll tell you honestly whether we can help, and how. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia