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Olam International Raises Debt, Temasek Backs

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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)

SWFI First Read, September 19, 2018

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QIA Eyes Investment in Chinese Lender Lufax

The Qatar Investment Authority (QIA) is in talks about a possible investment into Shanghai-based Lufax, one of China’s largest online lenders. The seller of the possible stake is China’s Ping An Insurance (Group) Co. Ltd. Lufax’s official name is Shanghai Lujiazui International Financial Asset Exchange Co. Ltd.

Wealth Funds Back Hotpot Giant

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Japanese Government Capital Provides Initial Life for Texas Bullet Train

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Dallas-based Texas Central Partners, LLC is the developer of a proposed high-speed rail system, dubbed the Texas Bullet Train, between Dallas and Houston. Project costs are estimated between US$ 12 billion to US$ 15 billion. The developer secured US$ 300 million in project loans from Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) and the Japan Bank for International Cooperation (JBIC). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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DOJ Investing Tesla Over Musk Comments

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The U.S. Department of Justice (DOJ) is conducting a fraud investigation over Tesla as its CEO Elon Musk made public statements on twitter. This is a criminal probe. In addition, earlier, SWFI reported the U.S. Securities and Exchange Commission (SEC) is conducting a civil inquiry into Elon Musk regarding his statements.

This all surrounds Musk tweeting in August that he was thinking of taking Tesla private and had “funding secured” for the transaction. Both government authorities are seeing if Musk misled investors and violated federal securities laws with his public statements.

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