Agri-food giant Olam International yesterday posted a 13.1 per cent drop in profit after tax and minority interests (Patmi) to $155.6 million for the first quarter ended March 31, from $179.1 million the year before.
The group also announced a three-for-20 rights issue that has been priced at $1.25 per share.
Olam expects to raise $601.7 million in gross proceeds, which will be utilised to repay the debt used to fund its US$950 million (S$1.3 billion) acquisition of United States spice company Olde Thompson last month.
In its business update, Olam said the drop in Patmi was due mainly to the absence of net exceptional gains, compared with the previous corresponding period.
Operational Patmi, which excludes exceptional items, grew by 15.5 per cent to $157 million in the first quarter, from $135.9 million the year prior.
Revenue, meanwhile, was up 14.5 per cent to $8.8 billion on the year, from $7.68 billion.
The group said it has $18.2 billion of total available liquidity to meet its working capital and capital expenditure requirements, including $6 billion of unutilised credit facilities and $8.4 billion of readily marketable inventories and secured receivables. As at March 31, Olam had cash and cash equivalents of $3.8 billion, while net gearing stood at 1.72 times.
The group observed a discernible pick-up in demand in the quarter due to Chinas rapid recovery and snapback from the worst impact of Covid-19-induced growth decline in major economies last year.
For its rights issue, Olam said its issue price of $1.25 per share represents a 26.9 per cent discount to its last traded price of $1.71 on Monday. The issue price also represents a 24.2 per cent discount to the theoretical ex-rights price per share of $1.65.
The group will close its books on June 30 to determine the provisional allotments of the rights shares to entitled shareholders. The shares will trade cum-rights to the rights issue up to 5pm on June 28, and ex-rights from 9am on June 29, which means anyone who purchases shares on and from June 29 will not be entitled to any provisional allotments.
The rights issue is fully sub-underwritten by major shareholder Temasek, through its wholly owned subsidiary Breedens Investments.
This means Temasek has agreed to subscribe to any rights shares that are not taken up by other existing shareholders, with no sub-underwriting fees paid.
Olam has appointed BNP Paribas (Singapore branch), Credit Suisse (Singapore), DBS Bank and HSBC (Singapore branch) as joint issue managers who, together with Mizuho Securities (Singapore), are appointed joint underwriters for the rights issue.
The group said the rights issue does not require shareholders approval as it is within the share issue mandate approved by shareholders at the groups April 23 annual general meeting.
Shares of mainboard-listed Olam closed at $1.62 yesterday, down nine cents or 5.26 per cent.
THE BUSINESS TIMES