SINGAPORE Feb 8 Muddy Waters LLC kept its
"strong sell" rating on Olam International Ltd, saying
the Singapore commodities firm's borrowings had increased in its
The short-seller also said that with Olam's bonds yielding
around 7 percent to 8 percent, which it feels is too low, the
company's interest burden is "not sustainable".
Olam said on Thursday it has begun a review of its business
priorities and free cash flow targets as it announced a 20
percent rise in second-quarter net profit.
"One of the bright spots for Olam investors is that the
company appears to be trying to rein in its capex and
acquisition spending," Muddy Waters said in a statement on
Olam shares rose 0.6 percent to S$1.645, about 5 percent
below the level before Muddy Waters attacked the company's
aggressive spending and high debt in November.
The shares had partly rebounded after Olam got full backing
from powerful Singapore state investor Temasek Holdings Pte Ltd
, its second-biggest shareholder, for a
The review and the termination of a proposed $240 million
investment in a sugar miller in Brazil are the first signs that
Olam is breaking away from its debt-funded series of
acquisitions over the past few years.