Bloomberg News

Temasek Boosts Stake in Olam to 17% After Backing Bond Sale

December 19, 2012

Temasek Holdings Pte, Singapore’s state-owned investment company, raised its stake yesterday in Olam International Ltd. (OLAM) after earlier this month saying it would back the commodity trader’s bond offering.

Temasek boosted its holdings from 16.3 percent to 17 percent, it said today in a statement on its website. Aranda Investments Pte, controlled by Temasek, bought 200,000 shares for S$293,000 ($240,361) yesterday, according to an Olam filing.

Olam, the world’s second-biggest rice trader, said Dec. 3 it will offer $750 million in bonds and as much as $500 million in warrants to address any concerns about its liquidity, after short-seller Carson Block said the company may fail. Temasek, Olam’s second-biggest shareholder, agreed to buy any rights not taken up by other investors.

“We are pleased to have the opportunity to add to our stake,” Temasek said today in the statement. Olam “represents a reasonably attractive investment over the long term,” it said.

Shares of Olam gained 4.4 percent to close at S$1.54 in Singapore, the highest price in two weeks. The benchmark Straits Times index rose 0.1 percent.

Temasek could end up holding as much as 29 percent of Olam if it exercises all the warrants in 2016 at the earliest, according to Sunny Verghese, Olam’s chief executive officer.

The stock has slumped 11 percent since Nov. 19 when Block first said at a London conference he was selling Olam shares short and that the company was at risk of collapse. Shorting refers to investors borrowing shares and selling them, betting a decline in prices will allow them to profit by buying them at a lower price later.

Olam said it faces no risk of insolvency and sued Block and his research firm Muddy Waters LLC on Nov. 21 in the Singapore High Court, calling the comments malicious falsehoods.

To contact the reporter on this story: Michelle Yun in Hong Kong at myun11@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net


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