Muddy Waters says Olam move to tap market raises more concerns
SINGAPORE Dec 4 (Reuters) - Short-seller Muddy Waters said on Tuesday that Olam International Ltd's "180-degree reversal" on tapping the markets validates its thesis that the Singapore commodities trader is in danger of failing, and it maintained its "strong sell" view.
"Only four days ago, (Olam CEO) Mr. (Sunny) Verghese vehemently insisted that it would not tap the markets for at least five months. This 180-degree reversal supports our thesis that the company was in dire straits over the weekend," Muddy Waters said in an e-mailed statement.
Verghese told Reuters in an interview last week that Olam had sufficient cash and did not expect to tap the debt markets for at least five to six months.
Olam said on Monday it is issuing $750 million of 6.75 percent five-year bonds at a price of 95 percent.
The bonds have warrants attached that will allow holders to buy a total of 387 million shares at $1.291, which would raise $500 million if they were all exercised.
The issue is backed by Singapore state investor Temasek Holdings Pte Ltd, which has a 16 percent stake in Olam. (Reporting by Eveline Danubrata; Editing by Edmund Klamann)
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