Golden Agri

GoldenAgri: Sharp share-price drop on its plans to raise up to US$500m via a convertible bond issuance may appear a little extreme as stocks generally don't react much to bond-issue plans. It's just that the market doesn't like the word 'bond' associated with it," analysts says. However, neutral to the fund-raising, but the umbrella group has previously defaulted on bonds. Golden Agri is controlled by Indonesia's Widjaja family; in 2001, one of the family-controlled companies, Asia Pulp & Paper, was responsible for the largest emerging-market bond default in history at US$13.9b. This is Golden Agri's first bond issue since then. Among the reasons cited for the fund-raising, Golden Agri said it may pursue acquisitions. But analyst notes that if they really want to go for an acquisition upstream, they can't buy much.