SINGAPORE Jan 15 Shareholders of Olam
International Ltd approved the payment of $6.4 million
in fees to a unit of Singapore state investor Temasek Holdings
Pte Ltd for fully backing the embattled commodity firm's $1.2
billion bonds-with-warrants issue.
The sub-underwriting fee, which had been expected to receive
approval, is being paid to Temasek, also Olam's
second-biggest shareholder, as the Singapore commodities firm
taps the debt market for funds to bolster its financial
Olam's bonds and warrants are expected to start trading on
Short-seller Muddy Waters LLC launched a scathing attack in
November on Olam's accounting practices, high debt levels and
investment projects, sending its bond and stock prices tumbling
and ultimately spurring the rights issue plan.
Temasek's backing for the complex bond issuance plan helped
to ease the pressure on Olam, although concerns over its debt
and it growth prospects persist and several brokers have cut
their ratings and earnings forecasts.
Temasek has built up its stake in the company to 19 percent
from around 16 percent before the Muddy Waters attack.
The Kewalram Chanrai group, Olam's biggest shareholder with
a 20 percent stake, and the company's chief executive, Sunny
Verghese, who holds 4.65 percent, voted in favour of the fee
Olam's shares ended 1.3 percent up at S$1.605 on Tuesday,
rebounding nearly 18 percent from a nearly four-year low hit in
December. But the stock is still down 8 percent from levels seen
before Muddy Waters targeted the firm.
Temasek's stake could rise as high as 28 percent if other
shareholders do not participate in the rights issue, an Olam
(Reporting by Eveline Danubrata; Editing by Anshuman Daga)