Olam International has indicated that it plans to slow the pace of investment and cut its debt levels in order to strengthen its balance sheet.
The company said it plans to cut its level of investment over the next three years by S$1-1.2bn (US$800-969m) and scale down operations in some business segments and markets in order to free up almost S$500m in cash. Previously, Olam had intended to invest around S$2.2bn-S$2.6bn over the three year period.
“The strategy going forward aims to deliver the twin objectives of continued growth in profits, as well as accelerated free cash flow generation from core business,” Olam CEO Sunny Verghese said in the statement.
The group aims to start generating free cash flows by the start of fiscal 2014, which begins in July, Olam added.
The move to water down its investment strategy follows shareholder criticism led by Carson Block and his research firm Muddy Waters. Olam initially responded to Block’s attack on its strategy with a lawsuit accusing him of libel and slander. However, the group withdrew the case earlier this month.