Olam proposes rights issue to raise about $445 mln

·1-min read
Olam proposes rights issue to raise about $445 mln

SINGAPORE, June 22 (Reuters) - Singapore-based commodity trader Olam International said on Tuesday it was planning a rights issue to raise net proceeds of about S$597.9 million ($445 million) to pay down some debt. 

Priced at S$1.25 on a basis of three rights shares for every 20 existing ordinary shares, the rights issue price represents a 26.9% discount to Olam's last traded price per share of S$1.71 on Monday. 

The issue is fully sub-underwritten by Olam's major shareholder and Singapore state investor Temasek Holdings . 

Proceeds from the rights issue will be primarily used to partially repay the debt used to fund the acquisition of U.S. spice company Olde Thompson, which Olam bought for an enterprise value of $950 million. 

The company also reported on Tuesday a 13.1% drop in its first-quarter net profit to S$155.6 million in the absence of net exceptional gains in comparison with last year, when the commodity trader recorded stake sales. Operational profit, excluding exceptional items, rose 15.5% to S$157.0 million. 

  ($1 = 1.3428 Singapore dollars) (Reporting by Aradhana Aravindan in Singapore, Editing by Sherry Jacob-Phillips) 

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