I reckon investors are waiting in anticipation for the second rebuttal report from  Olam. I asked myself  " why the management  would take such  a long time to come out a report.Dont  they have a very the experienced team working inside?" Maybe the report is not coming out afterall with fear of more scrutiny and might damper the share price.

I am not here to talk down the company,just that I wish to find out a balance and true views of this counter before any investment.

If you look at the big picture isnt it at the end of the day he is still raising monies from the market ? The Rights Issue...according to Olam...is to pay down the old debts.Irregardless whether the management does it with this complicated package (i.e equities come with bonds and warrants)or not.

 

On more than one occasion Mr Verghese has said that the firm has $10 billion in liquidity. Why does it need to raise more expensive debt to pay off cheaper debt due next year? Could it not have drawn on its credit lines to repay that debt? My point is that there are many signs of desperation shown by the management which I have highlighted in my earlier thread.

 

Anyway, I think we should not dwell too much into the company’s choice of raising  fund neither should we attempt to ask for views what the company should do or not do.Why cloud yourself with these noises?   Our views do not matter to them unless you are a mole planted by the company or my views have detrimental effects to your holdings. The company should seek expert advice from the financial managers, bankers and consultants if needed to.

 

You seem to be contradicting yourself on the objective of the bonds rights issue.

On 21/12/2012, 10:01, you wrote

“Heavy ownership by retail investors, who are attracted to the high yield, make Olam bonds especially volatile. Olam 2020s are nearly half-owned by retail investors and 2017s have 70 percent retail involvement. During the MW and Olam saga,the bonds are in very distressed state. Hence the main idea behind the fund-raising plan is to " break the negative cycle" of high bond yields filtering through to the equity market. Part of this proceeds will be used to pay up the 2013 maturing bonds. The rights issue will be a short-term positive for the stock as echoed by most analyists.”

However, now you are saying that the objective of the bonds rights issue is to raise money.

Which version of your story should we believe??

To me, I viewed this as a Sovereign wealth firm rescues an ailing commodities trader.

 

Two   worrying aspects are:

The fact that Olam now has to raise so much money so quickly is clearly an indication that Black’s allegations contained sufficient grains of truth and that the company really did need, now or soon, lots of cash just to survive. Companies in good shape do not make such offerings. Temasek’s full underwriting of the issue shows how desperate it is for Olam to survive.Otherwise it surely would have just ridden out the storm and let its subsequent results reveal that Muddy Waters was wrong. This is one of the pivotal and fundamental aspects in choosing a stock to invest in. Unlike someone here who like to sing praises and counter for wrong reasons just because one is heavily committed and long on this stock.I am certain if the price hit his target he will be the first to run and disappear from the radar.

 

On Temasek, one would  argue that Temasek, is throwing good public money after bad to save the faces of the the Temasek managers who committed so publicly to the Singapore-based Olam in the first place, buying 16 percent of the commodities trader in 2009.  Temasek is now being forced to put more money behind Olam to the extent that it may well feel obliged to provide more should this cash infusion prove insufficient. It is now so deep into Olam.  If you can recall  a couple of years back, the managers  have enough records of buying into fashionable stocks near the top and then having to help bail-outs on the way down. UBS was a classic example. GIC, the Government Investment Corporation, backed UBS big time when banking was the flavour of the day, losing massively. Temasek likewise lost heavily on Bank of America. Closer to home, Chartered Semiconductor was created in 1987 as a venture that included Singapore Technologies Engineering Ltd, another state-linked company owned by Temasek Holdings.When its shares were first floated in the market in 1999, IPO price was USD $20. 10 years later, it is worth only USD$1.86 per share.  At that  prices,  Temasek may have lose up to S$16 billion dollars from the deal eventually to ATIC.

 

Instead of cutting its losses now or staying on one side as Olam and Muddy Waters have their war of words, Temasek has chosen to use its financial muscle in a way which might be construed as of more interest to the management of Olam than to the citizens of Singapore.If Temasek saw intrinsic or true value in Olam it did not have to wait until now(when Olam in debacle)   to upped it stake.We only can hope Temasek makes the right bet this time.

 

  It is just coincidental news  release, or is it,    of big name support from Jim Rogers in the govenment managed sole newspaper here at the end of new funding process.One could think along that line  that  he moved to Singapore in 2009 probably  PR status with Singapore citzenship anytime from the Gov.

You scratch mine and I will do likewise.