Olam’s share price has dropped on “a bit less enthusiasm to the Temasek show of support. The bond and warrants deal was billed as a rights issue. Now people have had time to digest it,” says an analyst at a regional bank.
“It’s a bond raise with a fairly big yield,” he says, noting the yield is an effective 8% and adding it contradicts previous management guidance. “What we’ve been guided from Olam is that liquidity was stellar,” he says; “then all of a sudden you get a bond issue,” he adds.
“It’s not the killer punch. What would have been more straight forward would have been a share placement to Temasek,” which would have reduced gearing levels. “Instead we’ve had this complicated and contradictory structure of a new bond issue.” The stock is down 5.6% at $1.51.
No comments:
Post a Comment