SINGAPORE, Dec 3 (Reuters) - Singapore’s Olam International Ltd, under attack by short-seller Muddy Waters for its alleged aggressive spending, accounting practices and debt levels, announced a rights issue on Monday consisting of bonds and warrants.
The commodity trader proposed an underwritten rights issue of $750 million in principal amount of 6.75 percent bonds due in 2018, along with 387.4 million free detachable warrants.
The issue price of the bonds will be 95 percent of the principal amount and the gross proceeds from the issue of the bonds are $712.5 million, Olam said.
Olam said the transaction was fully backed by Singapore state investor Temasek Holdings Pte Ltd, which holds a 16 percent stake in the company.
Olam has sued Muddy Waters in a Singapore court and issued a detailed rebuttal of the firm’s allegations, saying it was not at risk of insolvency and had enough liquidity.
Each warrant carries the right to subscribe for one new share at an exercise price of $1.291 each, on the basis of “313 bonds of principal amount of US$1.00 each with 162 warrants for every 1,000 existing ordinary shares in the capital of the company,” it said.
Olam’s shares have fallen nearly 10 percent since the battle with Muddy Waters began last month. They closed at S$1.575 on Friday and were suspended from trade on Monday. (Reporting by Anshuman Daga and Eveline Danubrata; Editing by Edmund Klamann)