Singapore-based Olam International will raise funds of SGD437.5m (US$304.4m) by issuing new shares to Temasek Holdings, which will become the group’s second-largest shareholder.

The agricultural and food company will issue an aggregate of 273.46m of new shares to Breedens Investments and Aranda Investments, both wholly-owned subsidiaries of Temasek. The new shares represent around 13.76% of Olam’s enlarged share capital.

The purchase price was S$1.60 per share and represents a 17.4% discount on the weighted price of S$1.937 on 29th May.

“The terms of the subscription followed an extensive review of other capital-raising options, none of which would have assured the company of the quantum of funds available through this subscription,” the company said today (1 June).

Olam said the move was in line with its strategy to “proactively” manage its capital base and position itself for future growth and provides the financial strength and flexibility that will allow it to leverage its competitive position and pursue profitable growth.

“The strengthened capital base through the subscription announced today will provide the company with a strong platform to accelerate both its organic and inorganic growth opportunities,” Olam said.