Singapore-based commodity and dairy group Olam International said today (5 June) that it plans to raise a minimum of US$300m through a bond issue in order to fund growth.
The company has retained the right to issue a further $100m bonds in the event of oversubscription.
The bonds carry a coupon rate of 1% and a yield to maturity of 4.5% per annum. They are due to mature in 2013.
The bonds are also convertible into Olam shares at S$3.8464 a share, representing a 30% premium to the stock’s last traded price.
The net proceeds of the offering will be used to finance investments, joint ventures, mergers and acquisitions and reduce debt.
MD Sunny Verghese said: “Under current volatile and challenging equity and credit market conditions, we believe that high quality companies set themselves apart by being able to tap investors who are more cautious and discerning.
“With this convertible bond issuance, Olam is now very well positioned financially to capitalise on the numerous organic and acquisition growth [opportunities].”