SINGAPORE, Feb 7 (Reuters) - Singapore commodities firm Olam International Ltd, which came under attack last November by short-seller Muddy Waters LLC, said it has begun a review of its business including it priorities, capital spending and free cash flow generation targets.
“The review is expected to be completed within the next three months after which a suitable announcement will be made,” Olam said in a statement after reporting its quarterly results.
Olam said its net profit rose 20 percent to S$154.1 million ($124 million) for the three months to Dec. 31, from S$128.5 million a year earlier.
It added that the results included an operational gain of S$22.1 million due to fair valuation of biological assets.
For the company statement, click:
Muddy Waters in November rated Olam shares a “strong sell” and criticised its accounting practices, high debt levels and investment projects, sending the company’s bond and stock prices tumbling and spurring it to announce a bonds-with-warrants issue the following month to shore up its finances.
Olam, backed by Singapore state investor Temasek Holdings Pte Ltd, raised $712.5 million from the rights issue last month. If the warrants are converted to shares after three years, it could raise an additional $500 million.
While some analysts refrained from giving second-quarter profit forecasts for the company due to the uncertainty stirred by Muddy Waters’ allegations, two analysts gave estimates ranging from $105 million to $117 million. ($1 = 1.2381 Singapore dollars) (Reporting by Eveline Danubrata and Anshuman Daga; Editing by Edmund Klamann)