Olam International Raises Debt, Temasek Backs
Olam International Ltd plans to raise additional capital through a bonds-with-warrants issue. Temasek Holdings owns about 16% of Olam and is the second largest shareholder in the company. Olam will offer US$ 750 million in bonds and up to US$ 500 million in warrants to existing shareholders. Temasek has the potential to raise its position up to 29% over a period of time if other shareholders do not buy in. Olam International Ltd proposed the debt capital raise.
Olam has been challenging Muddy Waters, a short-seller research firm, about a 133-page report detailing aggressive spending, accounting practices and debt levels that may put the firm on the verge of collapse. Olam sued Muddy Waters in a Singapore court and issued a rebuttal saying the firm was not at risk of insolvency and had plenty of liquidity.
“While no business is without risks, we remain comfortable with Olam’s credit position and longer term prospects, and are pleased to have another opportunity to invest in the company, alongside other shareholders,” said David Heng, Senior Managing Director, Investments of Temasek Holdings.
Olam International Ltd Issuance
- Nominal $750 million – 6.75%, 5-Year Bonds, price at 95% (raising $712.5 million)
- Attached Warrants – Allow bondholders to buy 387 million shares at $1.291 (raising $500 million if fully exercised)
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