Golden Agri-Resources moots share sale worth US$100 mil via India subsidiary's IPO

The Edge Singapore
The Edge Singapore8/8/2021 02:07 PM GMT+08  • 2 min read
Golden Agri-Resources moots share sale worth US$100 mil via India subsidiary's IPO
GAR paid US$17.88 mil for its controlling stake in GEF back in 2014
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Leading palm oil company Golden Agri-Resources plans to sell shares worth some US$100 million ($135 million) in the IPO of a subsidiary in India.

In an Aug 8 announcement, GAR said Gemini Edibles & Fats, its 56.27%-held indirect subsidiary, has on Aug 7 filed a draft prospectus with the National Stock Exchange of India for a proposed listing on the Bombay Stock Exchange.

GEF, described by GAR as one of the leading and fastest-growing edible oils and fats companies in India, plans raise some 25 billion rupees worth of shares, or around US$333 million, via the proposed IPO.

GAR, which plans to sell its portion of shares worth some 7 billion rupees, or US$100 million, will remain as the single largest shareholder of GEF upon completion of the proposed IPO, and “for the foreseeable future”.

See also: RHB keeps 'trading buy', TP 30 cents for Golden Agri after weaker-than-expected 1Q results

GAR is one of the companies controlled by Indonesia’s Widjaja family, whose interests include coal mines, real estate and many other businesses.

Plans for GEF’s IPO were first indicated back in May this year.

GAR gained control of GEF back in 2014 after paying some US$17.88 million for a 50.01% stake to its then controlling shareholder Ruchi Soya Industries.

“Details of the terms of the proposed IPO are still being finalized and will be subject to, among other things, market conditions, the relevant regulatory and other approvals being obtained, and the execution of definitive agreements by the relevant parties,” says GAR.

Another Singapore-listed palm oil company, Wilmar International, is similarly planning a listing of a linked company in India.

These capital market moves come amid record palm oil prices.

On Aug 2, Wilmar announced that Adani Wilmar, its joint venture in India, is planning an IPO worth up to 45 billion rupees, or some $820 million.

Adani Wilmar is a 50-50 joint venture between Wilmar and Indian conglomerate Adani Group.

For more stories about where the money flows, click here for our Capital section

Separately, late last year, Wilmar spun off its China-based subsidiary, Yihai Kerry Arawana Holdings, for its own listing in China. Wilmar retains ownership over around 90% of the shares.

Based on Yihai Kerry Arawana’s Aug 7 closing price, its market is RMB385.4 billion, or around $80.5 billion. In contrast, Wilmar’s own market cap, based on Aug 7’s closing price of $4.45, is $28.5 billion.

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