Olam International

(14-03-2014, 09:20 AM)safetyfirst Wrote: For all you know, this takeover may just be a cover-up for any cockroaches in olam. If olam stays listed, all singaporeans will come to know of any bad news that is made public. If olam is delisted, uh-hmmm, you will never hear of any bad news.

Well this is just my opinion, if temasek was serious about taking it private, it could have done it when muddy-waters whacked so hard many months ago, why do it now ...

I have a different view.

Why didn't offer then, but now? Olam did has issue then, with its balance sheet. So maybe not the time for full commitment then. Olam had done lots of re-balancing in its balance sheet, and a much better and healthier Olam now.

(not vested)

Don't know leh! I tend to agree with safetyfirst, because Olam is so dominant that the fallout on SGX of something going wrong may be worse than what happened with the 3 stooges recently. Could Temasek have detected something really ugly - some smelly cockroaches that it's safer to buy Olam over? I am vested but only in the 6.75% bonds; sold out my Olam stocks some time back at a profit. The last I saw, there were some 11M lot bids to buy at $2.20 (I think the SGX website crashed as I cannot get back in on a refresh). I was tempted to throw a few quids into the lot, because now it's very "safe" with Ah Gong in control. But then if this is the price based on Temasek's valuation of the company, how is the price going to go up in the (not too far) future unless via frothy rumours?

looking at their latest cashflow and balance sheet.....

they have $3b loans due within a year and negative operating cashflow and less than $1b cash on hand......

(14-03-2014, 09:55 AM)Behappyalways Wrote: looking at their latest cashflow and balance sheet.....

they have $3b loans due within a year and negative operating cashflow and less than $1b cash on hand......

So, tax payer monies are being used to finance this? A separate question, if the offer put through, what happen to the bonds? Redemption or delist?

Have to say olam's cash flow and balance sheet is among the bottom of my excel list. So a bit surprised.

Just another possibility. TH foresees shortage of food supply and sharp rise in commodity price, given the recent global climate. Maybe when TH first invest in olam, it was a "strategic plan", and now the offer is another "strategic plan".

(14-03-2014, 10:44 AM)valuebuddies Wrote:

(14-03-2014, 09:55 AM)Behappyalways Wrote: looking at their latest cashflow and balance sheet.....

they have $3b loans due within a year and negative operating cashflow and less than $1b cash on hand......

So, tax payer monies are being used to finance this? A separate question, if the offer put through, what happen to the bonds? Redemption or delist?

Well, the cash offer is initiated by a consortium lead by Temasek.

With the assumption that Temasek's decision is not solely on financial consideration, than does it mean others in the consortium are doing "national service" with their hard-earned money?

May be due to saving the "face" of the group of 10 executives and founding members? It is close to 12% premium on last traded price, a very expensive price to pay for the "face" indeed...

Just to share part of my thinking process.

(14-03-2014, 11:17 AM)CityFarmer Wrote:

(14-03-2014, 10:44 AM)valuebuddies Wrote:

(14-03-2014, 09:55 AM)Behappyalways Wrote: looking at their latest cashflow and balance sheet.....

they have $3b loans due within a year and negative operating cashflow and less than $1b cash on hand......

So, tax payer monies are being used to finance this? A separate question, if the offer put through, what happen to the bonds? Redemption or delist?

Well, the cash offer is initiated by a consortium lead by Temasek.

With the assumption that Temasek's decision is not solely on financial consideration, than does it mean others in the consortium are doing "national service" with their hard-earned money?

May be due to saving the "face" of the group of 10 executives and founding members? It is close to 12% premium on last traded price, a very expensive price to pay for the "face" indeed...

Just to share part of my thinking process.

Consortium is just for the purpose of this takeover. The only one forking out cash to acquire additional stake is Temasek.

Temasek - 20 years view mah....20 years from now, people will still be eating cashew nuts...

There is no definite answer because it is all guessing. Unless one can get the initiator(s) to tell you truthfully their intention(s).

by taking over the company, Temasek will also have to forgo the high interest.....


According to one analyst, the equity option attached to the bonds is worth another two to three percentage points of additional yield, putting the rate of return on Olam’s new bonds at 10%–11%. Michael Dee, a former Temasek executive, put it even higher at 13% in a commentary published in Singapore’s Business Times.

http://www.ifrasia.com/olam-pays-up-for-...92.article

(14-03-2014, 11:17 AM)CityFarmer Wrote:

(14-03-2014, 10:44 AM)valuebuddies Wrote:

(14-03-2014, 09:55 AM)Behappyalways Wrote: looking at their latest cashflow and balance sheet.....

they have $3b loans due within a year and negative operating cashflow and less than $1b cash on hand......

So, tax payer monies are being used to finance this? A separate question, if the offer put through, what happen to the bonds? Redemption or delist?

Well, the cash offer is initiated by a consortium lead by Temasek.

With the assumption that Temasek's decision is not solely on financial consideration, than does it mean others in the consortium are doing "national service" with their hard-earned money?

May be due to saving the "face" of the group of 10 executives and founding members? It is close to 12% premium on last traded price, a very expensive price to pay for the "face" indeed...

Just to share part of my thinking process.

As usual cash is not a issue with Tamesak. The source of funds is only 2.5% interest so they can hold 20yrs. I think they are after the farms in many countries so that in case Sg got problem (touch wood), they can migrate for a farm-stay perhaps.

20 years? I may not even be alive by then! Most of us small timers cannot afford to think and act like Tsk. We've got to put bread on the table tomorrow morning! Think I'll stand back and watch how the saga develops.