Singapore commodities giant Olam International Limited has announced that it has notified NZ Farming Systems Uruguay Limited (NZFSU) of its intention to increase its equity in the company with the offer of NZ$0.70 per share for all of the shares in NZFSU totalling 22 percent.

Olam is currently the largest shareholder in NZFSU with a 77.98 percent shareholding following
the takeover offer for NZFSU that closed in September 2010. The Offer will be unconditional
on opening, and NZFSU shareholders who accept the offer will be paid within 5 days of their
acceptance.

The takeover offer was priced at NZ$0.70, compared to the company's last traded price of NZ$0.55.

Singapore's Olam Group has been known for its distinctive position integrating the entire physical value chain from farms in the producing countries to the factory gate in destination markets. As supply chain managers, we manage every stage of the product journey from farming, origination, primary processing and logistics, to secondary processing, marketing, distribution and customer delivery, managing the risks present at each stage.

The company operates in over 60 countries, delivering 20 products to more than 11,100 customers. We employ over 10,000 people worldwide. We enjoy a leadership position in many of our businesses, including cashew, Almond, Spices & Dehydrates, Sesame, cocoa, coffee, rice, cotton, Teak as well as Palm and Rubber in West Africa.

The Offer gives shareholders another opportunity to exit at the same price offered in Olam's
2010 Takeover Offer, despite the increase in capital requirements and changes to the
business outlook for NZFSU compared with the earlier NZFSU Board's forecasts at the time
of the previous offer.

Olam's offer price of NZ$0.70 cash per NZFSU share represents a 25% premium over the
3-month average trading price of NZ$0.56 and provides the following benefits to NZFSU
shareholders:

  • An opportunity to realize a significant premium to the current market price for NZFSU shares;
  • The ability to sell their NZFSU shares in volume. Trading in NZFSU is very illiquid, with no trading occurring on more than half the trading days in 2011 and an average of less than NZ$4,500 worth of shares traded daily over the same period; and
  • An opportunity to sell their shares before they are called upon to participate in any planned rights issue or face the prospects of being diluted. NZFSU announced in February 2011 that it expected to raise over US$100m (NZ$125m) of new capital within six to twelve months to fund the updated business plan capital expenditure and repay the Olam shareholder loan.

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