atans1

Olam: Snake confuses mongoose

In Commodities, Corporate governance, Temasek on 04/12/2012 at 5:58 am

Olam proposed an underwritten rights issue of US$750m in principal amount of 6.75% bonds due in 2018, along with 387.4 million free detachable warrants. The issue price of the bonds will be 95% of the principal amount and the gross proceeds from the issue of the bonds are US$712.5 million. Terms of bond are generous.

Olam said the transaction was fully backed by  Temasek which owns a 16% stake in the company. Temasek’s commitment “is a very strong, decisive action (for investors) not to have any worries about any of the allegations,” Olam’s CEO said.

The issue is underwritten by four major bank creditors: Credit Suisse, DBS, HSBC and JP Morgan. Again another sign of confidence.

So Temasek and the banks are onside. Goes without saying that the Indian conglomerate controlling Olam will subscribe for its share: It would, wouldn’t it?

And the shortists will have to cover their positions as investors recall their shares to make sure they get their rights.

Yr move, mongoose.

PS (at 8.50am): Gd counter by snake (must be King Cobra) to offer to pay for credit rating. Ang Moh Kaws must never underestimate Indians.

Update (1.15pm)

Shares of Olam climb more than 8%

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  1. Temasek decided to swim or sink with Olam-a company whose future appears to be in great doubt,with whose money ?Our money.I pray that Olam will swim and prove so many jokers wrong,it is Christmas time.

    • Afraid markets are not convinced by Temasek’s efforts. Shares are back down and bonds are have not recovered. Olam is refinancing debts at 10% when they could have done so at 6% couple weeks back.

  2. This does not seem right where it holds full backing for a transaction where they just owns 16 percent in the company. Backing should be for 16% where they own and others should chip in for what is required. I will not back a company up where I know if it is in debt, ONLY CERTAIN WORLD CLASS FINANCIAL EXPERTS WILL.

  3. I have seen Mongoose wrestle with snake before. But as it is, I can see that this is no ordinary snake they wrestling with now.

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