Olam’s rights issue drew an immediate response from Carson Block’s Muddy Waters.
Muddy Waters Calls Temasek-backed Olam Fund-Raising a ‘Bailout’ (CNBC)
Stop-Gap Bailout of Olam Validates MW’s Thesis (Muddy Waters Research)
Video of Carson Block (Muddy Waters) on CNBC
Olam has given the following clarification:
Further to media reports regarding the process of the recently announced rights issue, Olam International Limited (“Olam”) would like to clarify the following:
1. On Saturday December 1, Olam requested one of its leading international investment banks to take an investment opportunity to Temasek aimed at reducing uncertainty about Olam in both the bond and equity markets.
2. Three additional investment banks were then invited to participate as joint book runners, lead managers and underwriters (“JBLMs”). The JBLMs are Credit Suisse (Singapore) Limited, DBS Bank Ltd., HSBC and J.P. Morgan (S.E.A.) Limited.
3. Temasek made its own independent assessment on the investment merits of this transaction and decided to support it.
4. The JBLMs confirm that there was no mention of any concern regarding Olam’s credit position in their discussions with Temasek.
We believe that this is a strong and positive transaction that will serve the interests of all our continuing stakeholders.
The market does not seem to be very impressed with the price of the stock falling back to levels before the rights issue was announced.