Olam

Olam: goes ex-rights today. Recall, the renounceable rights are on the basis of, i) 313 bonds (principal amount of US$1, issue px at 95%, 5 yrs maturity, 6.75% coupon), stapled with ii) 162 warrants (exercise price of US$1.291/sh) for every 1000 Olam shares. Co highlights its 15 Jan'13 EGM will no bearing on its rights issue. The EGM will be to vote on the payment of sub-underwriting fee by banks managing its rights issue to Temasek's unit Aranda Investments. Temasek which collectively holds 18% stake will abstain from voting. CEO Sunny Verghese and Kewalram Spore with a combined 24.9% stake will vote in favour of the payment. A 'no' vote means Aranda will not be paid a fee but Olam will still have to pay the full underwriting commission to joint lead mgrs - CS, DBS, HSBC, JPM, which amts to 2% of bond's principal amt or US$15m. The banks will, in turn, pay 0.85% or US$6.375m to Aranda for absorbing all the rights that are not taken up by other sh/h - if given approval at the EGM. Olam: Grp now holds a 100% interest in NZ Farming Systems Uruguay (NZFSU), following its' full cash takeover offer for all of the shares it did not already own, which closed on Nov 30. On Nov 26, Olam had acquired more than 90% of the shares in NZFSU and it completed its' compulsory acquisition of the remaining NZFSU shares for NZ $25.8m. Separately, Jim Rogers is said to be taking up Olam's Rights issue according to The Straits Times, whose backing marks another show of confidence for the embattled firm, whose proposed rights issue of bonds and warrants is meant to shore up confidence and undermine short-sellers. This comes on the heels of Temasek Holdings' commitment to mop up all the bonds and warrants that Olam's other eligible shareholders choose not to subscribe to.