"Olam shares surge on bonds issue plan - Channel NewsAsia"

[Zatoichi]

http://www.channelnewsasia.com/stories/afp_singapore_business/view/1240979/1/.html
(Posted: 04 December 2012 1308 hrs)

SINGAPORE: Shares in farm commodities supplier Olam surged Tuesday after announced a US$1.25 billion bond issue, but US-based short seller Muddy Waters warned the move would only postpone its collapse.

Olam soared as high as 8.6 per cent in the morning session at the Singapore Exchange after it announced the rights issue, which is fully backed by its second-biggest shareholder, Singapore's Temasek Holdings. In early afternoon trade they had eased to sit up 3.5 per cent at S$1.63.

The issue will comprise US$750 million in bonds, and warrants of up to $500 million and comes after Muddy Waters warned about the Singapore-listed firm's future last month.

"We've obviously seen the stock come back on to the market today in a relatively positive reaction thus far," said Jason Hughes, head of premium client management for IG Markets Singapore.

However Muddy Waters said the move had actually raised the possibility the company "could have been only days away from collapsing".

"The US$750 million that Olam is raising merely postpones the collapse that we feel is almost inevitable," it said in a statement, noting that this was only a portion of the S$4.6 billion (US$3.8 billion) it needs to raise in the next 12 months to stay afloat.

"Olam's fundamental problem remains unchanged: the company has borrowed substantial amounts of money to fund capital projects that we believe are incapable of repaying the debt," it said.

Muddy Waters has questioned Olam's accounting practices, which it claimed masked its debts.

The US firm predicted it would fail like US energy trader Enron whose collapse in 2001 was triggered by US government probes into its accounting standards.

Olam chief executive Sunny Verghese on Monday insisted Olam is on a sound financial footing and the rights issue was meant to show investors the company can still access capital markets.

"We are doing this to demonstrate ... that we can access debt and capital markets at these rates today (and) we have a significant shareholder who is willing to backstop us and support us not with words but with action," he said.

But Hughes said the conflict between Olam and Muddy Waters was likely to continue for some time.

"I don't think its the last we've seen in this. The fact that we're potentially going down the court route in terms of allegations and counter-allegations... means it's going to be a long drawn out process," he said.

Olam last month filed a defamation suit against Muddy Waters in the Singapore High Court, with the US company threatening to counter-sue Verghese for alleging it was a front for hedge funds.

http://www.bloomberg.com/quote/OLAM:SP

 

[Bigfuck]

The curse of the Ho Jinx has been cast. Olam is hexed. Singapore taxpayer monies going down the drain while Jinx enriches herself with guffaws the likes the world had, has and will never see after her passing.

 

[GOD IS MY DOG]

with Temasek as shareholder, Olam may be OwLan but won't go belly-up.........

didn't the farking CEO ah neh bought more shares ?...............this is virtually a sure sign shares will go up..........insider trading mah...........


but price go up will be short term lah...............

 

[Bigfuck]

Carlson can accuse insider trading - it would be legitimate.

 

[Dinosaur]

(Posted: 04 December 2012 1308 hrs)

SINGAPORE: "Olam's fundamental problem remains unchanged: the company has borrowed substantial amounts of money to fund capital projects that we believe are incapable of repaying the debt," it said.

Muddy Waters has questioned Olam's accounting practices, which it claimed masked its debts.

The US firm predicted it would fail like US energy trader Enron whose collapse in 2001 was triggered by US government probes into its accounting standards.

Why did Olam not take up the offer by Muddy Waters for a free financial "health checkup" by Standard & Poor's? Does it have something to hide from us investors?

If I were Muddy Waters, I would subject Olam to a Standard & Poor's analysis.

"We are doing this to demonstrate ... that we can access debt and capital markets at these rates today (and) we have a significant shareholder who is willing to backstop us and support us not with words but with action," he said.

That significant shareholder also has many significant PAP-linked investors.

 

[krafty]

wtf! outlook for bond is bad according to jim rogers, and they are still issuing...???

btw, short term or long term?

*scratch head*:*::*:

 

[halsey02]

wtf! outlook for bond is bad according to jim rogers, and they are still issuing...???

btw, short term or long term?

*scratch head*:*::*:

JUNK BONDS??? or James bond??

 

[watchman8]

Why did Olam not take up the offer by Muddy Waters for a free financial "health checkup" by Standard & Poor's? Does it have something to hide from us investors?

That significant shareholder also has many significant PAP-linked investors.

That significant shareholder has exactly 60.1% PAP supporters.

Just recently they said no cashflow problem coming. Now want to raise USD 1.25bn to roll over debts. Sounds like banks are pulling it in. That's why Temasick got to commit to buying up the unsubscribed rights offer.

Lets see if Temasick ends up eating up bulk of the new rights offer. The other shareholders must be fuming at the need to cough up more cash or suffer dilution.

We will see how much more cash the company will need to raise in the coming quarters as the company will likely need to raise even more cash as banks get jittery and refuse to roll over debts, or will demand very high interest rates.

Good morning surge of share price, great opportunity for angry investors to escape.

 

[Zatoichi]

The curse of the Ho Jinx has been cast. Olam is hexed. Singapore taxpayer monies going down the drain while Jinx enriches herself with guffaws the likes the world had, has and will never see after her passing.

with Temasek as shareholder, Olam may be OwLan but won't go belly-up.........

didn't the farking CEO ah neh bought more shares ?...............this is virtually a sure sign shares will go up..........insider trading mah...........

Temasick got to commit to buying up the unsubscribed rights offer.

It's called: http://en.wikipedia.org/wiki/Crony_capitalism
A sure-win formula for the cronies.

btw, short term or long term?

*scratch head*:*::*:

As long as Temasek loves a company, it's always till DEATH do us part, right? LOL
Maybe Temasek and Olam are getting married? LOL

 

[Bigfuck]

It's called: http://en.wikipedia.org/wiki/Crony_capitalism
A sure-win formula for the cronies.



As long as Temasek loves a company, it's always till DEATH do us part, right? LOL
Maybe Temasek and Olam are getting married? LOL

They are already sodomizing one another.

 

[watchman8]

As long as Temasek loves a company, it's always till DEATH do us part, right? LOL
Maybe Temasek and Olam are getting married? LOL

Temasick is medusa. Whatever meets her eyes turns into rock.

Interestingly, this rights issue is only scheduled for vote next year march. Maybe temasick also got cold feet. Want to test if olam can last for four more months before pumping in the money?

 

[Zatoichi]

Maybe temasick also got cold feet. Want to test if olam can last for four more months before pumping in the money?

Here's my conspiracy theory:

Only anti-PAP, anti-Temasek, anti-Olam shareholders/short-sellers would aggressively sell Olam shares in high volume during the next few months.

So Temasek is simply getting some of its not-so-well-known cronies (without any obvious, not even indirect, links to Temasek) to secretly support Olam's stock price at a certain level that Temasek wants, UNTIL the high-volume sellers are done with their bearishness.

After that, the only sellers left would be the low-volume sellers, which Temasek can easily defeat in one way or another.

By the end of 2016, 4 years from now, if/when Olam starts making its hoped-for $1 billion-per-year profit, and becomes another Wilmar, Temasek and its cronies can then relax and boast to the whole world about how great Olam is.

 

[watchman8]

Here's my conspiracy theory:

Only anti-PAP, anti-Temasek, anti-Olam shareholders/short-sellers would aggressively sell Olam shares in high volume during the next few months.

So Temasek is simply getting some of its not-so-well-known cronies (without any obvious, not even indirect, links to Temasek) to secretly support Olam's stock price at a certain level that Temasek wants, UNTIL the high-volume sellers are done with their bearishness.

After that, the only sellers left would be the low-volume sellers, which Temasek can easily defeat in one way or another.

By the end of 2016, 4 years from now, if/when Olam starts making its hoped-for $1 billion-per-year profit, and becomes another Wilmar, Temasek and its cronies can then relax and boast to the whole world about how great Olam is.

You joking. People don't buy or short olam according to political view. If olam is strong, there will be no lack of bond investors and banks willing to provide money to the company.

The shortists can be defeated easily by pulling back all the shares on loan. The share price has not be doing well for some time, so it means investors in general are not pleased with the company.

An attack from muddy water can cause so much panic, and even an unexpected usd 1.25 bn cash call. If this is not a major red flag, what is?

If I'm not wrong, Wilmar had a more balanced growth, as in some of the plantations are already yielding as the company expanded on controlled pace. Olam went on buying binge on too many assets that are not yielding much at the moment, otherwise it would have no problem managing the debts. Nobody knows if the purchases will eventually yield as projected. Does temasick have sufficient agri specialists to go to the dozens of countries to verify the assets? Not too long ago, a china firm Oceanus declared a big write off because their stock of abalone suddenly died, and all the dead abalone thrown away, totally no trace.

is there a possibility that an Olam insider told muddy water something more about the olam investments in recent years? As people say, if there's no wind, there's no wave.

 

[Zatoichi]

An attack from muddy water can cause so much panic, and even an unexpected usd 1.25 bn cash call. If this is not a major red flag, what is?

It is possibly a red flag, but my point is that you and many other people are being too money-minded.

I bet that Temasek is smart enough to be aware of the possibility, and very high probability, of STRONG INFLATION in food prices around the world because of so much money-printing and the consequent FLOOD of paper money in the worldwide monetary system, not to mention the obvious occasional natural disasters, especially DROUGHT, around the world that GUARANTEES crop failure and, therefore, shortage of food.

It's obvious that STRONG inflation in FOOD prices would result in MONETARY profits for Olam in the future, so it's important to OWN all those farmlands FIRST and be ready to capitalize on the worldwide Commodities Boom/Bull Market.

Besides, even if food prices don't rise significantly or even if they should but don't due to price controls by governments around the world, there is still no other way to overcome food shortages, especially in a tiny island-country like Singapore, than by MAXIMISING the amount of FARMLAND owned by a country.

Nobody knows if the purchases will eventually yield as projected.

But neither is it a sure thing that they won't yield as projected, right?

Does temasick have sufficient agri specialists to go to the dozens of countries to verify the assets?

Maybe or maybe not.
But in any case, that's not Temasek's job.

Temasek's job is to make sure that the MANAGEMENT of the companies it invests in are TRUSTWORTHY.
And if those managers of whatever companies fail to do a good job, they'll be sacked, just like how one former CEO of UBS had to resign last year over the rogue trading scandal that cost UBS $2.3 billion:
http://www.channelnewsasia.com/stories/afp_world_business/view/1155298/1/.html
http://sg.news.yahoo.com/ubs-ceo-gruebel-resigns-over-rogue-trading-loss-101043341.html
http://www.forbes.com/sites/halahtouryalai/2011/09/24/ubs-ceo-resigns-amid-rogue-trading-scandal/
http://www.businessinsider.com/ubs-ceo-resigns-2011-9
Remember? (Of course, that was GIC's, and not Temasek's, investment, but it was ultimately still an investment by the Singapore Government)

is there a possibility that an Olam insider told muddy water something more about the olam investments in recent years? As people say, if there's no wind, there's no wave.

Of course, there's that possibility, but as I've said, all the naysayers are simply TOO money-minded.

 

[bushtucker]

surged to 1.71 then dropped back to 1.60.

 

[Merl Haggard]

Olam CEO Sunny Verghese earlier claimed that Olam could easily survive 12-18 months even in a credit market seizure and now he has come out to raise another $1.25b.

This exercise will make him sound rather hollow and I think minority shareholders' confidence except for Temasek may be eroded.

Today Olam hit a high of 1.71 during the first 30 mins of trading and it closed at 1.60.

Sunny Verghese's intention for the rights issue was to squeeze on the short-sellers, but instead many investors were trapped by this morning price run-up.

Since Olam price could not hold despite the $1.25b being raised, I expect more adverse reports to surface.

 

[watchman8]

It is possibly a red flag, but my point is that you and many other people are being too money-minded.

I bet that Temasek is smart enough to be aware of the possibility, and very high probability, of STRONG INFLATION in food prices around the world because of so much money-printing and the consequent FLOOD of paper money in the worldwide monetary system, not to mention the obvious occasional natural disasters, especially DROUGHT, around the world that GUARANTEES crop failure and, therefore, shortage of food.

Yeah, temasick was smart enough to get screwed thoroughly so many times in past decade. You want a list? If you look solely at their non-GLC investments, the statistics will likely shock a lot of people.

Many of Olam agri investments are in countries with unstable government and/or weak legal framework. That's why I ask if temasick can verify all the underlying investments? If cannot, then temasick better don't double down.

This has nothing to do with your nonsense on money minded. The key question is, are these underlying investments really as credible as what olam claims it to be?

 

[Confuseous]

surged to 1.71 then dropped back to 1.60.

The stock was $2-76 on February 8th this year and closed at $1-60 today.
The CEO's personal purchase of one million shares is purely symbolic - today's volume was 88 million. (He already owns 110 million shares). Together with two independent directors who bought 200,000 shares each (the first time they own Olam shares - that is how confident they are/were) the last few days is just one big joke. Zero impact on the market.

The counter is whip-sawing on SGX because of the activities of our own short-sellers, who get them from CFD dealers - so in the bigger scheme of things, the counter will go down, down, down. And with the lawsuits flying around, management time (and expenses) will lose focus.

Trust CNA to play up the deal, but reality is more stark than that. Temasek die die got no choice - smile, and promise to buy up all unsold bonds. Whose money with, you think?

 

[Merl Haggard]

The curse of the Whore Jinx has been cast. Olam is hexed. Singapore taxpayer monies going down the drain while Jinx enriches herself with guffaws the likes the world had, has and will never see after her passing.

Small change for Whore Jinx and this could be a repeat of another ABC.

 

[watchman8]

Small change for Whore Jinx and this could be a repeat of another ABC.

If temasick is holding even more of olam bonds and private papers, then the financial lost could be more severe.

Also olam is listed in sg, unlike ABC learning. So many mum and pop sinkies are in this. Temasick coming out strongly to support olam will give these mum and pops confidence to hold until eventual end. The political impact will be much larger.

Temasick better be really sure and have own team of agri specialists to investigate, and I'm not referring to the office analysts type, but those that have done real farming in all these countries before.