ShareJunction - Stock Forum Messages

Olam Intl

OLAM_OLAM

When is the dividend payout due? hasn't yet hit my account.

Big difference between debt and leverage. Here are the debt nos: Jun 08 total debt $2.98 bn, mkt cap $4.16 bn. A year earlier Jun 07 total debt $1.92 bn, mkt cap $4.79 bn.

Olam by any account was NOT highly geared 5-6 years ago.

jj7007 ( Date: 04-Nov-2013 09:37) Posted:

Olam high debt? this is very old news lah, way before the stupid angmorican announced he was shorting it. It has always been very high geared since 5 yrs ago, and paying very high interested on some syndicate loans but hey they are making $.

At the price, they are actually still lagging the market.

Me sold at 1.595 and started buying back slowly from 1.51 and below. Was a little excited and went in a little early. Having said that, i'm no big time punter or contra player, so price dips don't kill me.

Positioned for a nice year end rally

Strongly agree with you. bought the price above 3 and dump it around 2.80 in years ago. The model of business they running seem like benefit only to board of directors only.

roostertan ( Date: 05-Nov-2013 11:49) Posted:

Since when ah neh words can be trusted. How many times we hv see him flip roti prata. Only way is to replace him with more efficient management team. Having led olam to this stage is a sad story. Sigh....

Aiyah, it went below $1.5

Said all he wants, ... wait to be seen. regular contact with investors, I am sure it is not anyone of us.

The true test is coming .... maybe they will sell another asset to shore up .... that again goes to show MW is correct.

Anyway, MW has not fired the shot yet. Relax ..... it will go below $1.4

Aiya, you just ignore him. MW still holding on to large shorting position. Just wait for short squeeze only when time is ripe. Pointless to argue with him when he did not even mentioned which news he was referring to.

jwblue ( Date: 05-Nov-2013 10:06) Posted:

In response to OLAM investor's concerns about debt the company is reorganizing. The concern was unwarranted and was influenced by Muddy Waters' opinion.

(Olam Chief Executive Officer Sunny Verghese )Verghese said Olam is on track to be free-cashflow positive in the year to June 2014, one year earlier than previously forecast. He added that the company's debt-to-equity ratio is below two times and the company can maintain this level.

We regularly are in contact with our investors, they are very pleased with the recalibrated stand and they are waiting to see how we execute," he said.

" But they have to be patient and we have to guide them to be patient because none of the measures that we are taking are short fixes, they will take time to execute."

http://www.reuters.com/article/2013/11/04/us-commodities-summit-olam-idUSBRE9A30D420131104

In response to OLAM investor's concerns about debt the company is reorganizing. The concern was unwarranted and was influenced by Muddy Waters' opinion.

(Olam Chief Executive Officer Sunny Verghese )Verghese said Olam is on track to be free-cashflow positive in the year to June 2014, one year earlier than previously forecast. He added that the company's debt-to-equity ratio is below two times and the company can maintain this level.

We regularly are in contact with our investors, they are very pleased with the recalibrated stand and they are waiting to see how we execute," he said.

" But they have to be patient and we have to guide them to be patient because none of the measures that we are taking are short fixes, they will take time to execute."

http://www.reuters.com/article/2013/11/04/us-commodities-summit-olam-idUSBRE9A30D420131104

Indeed. Just as I have mentioned. The news allow the sellers to offload their position. That news is nothing ... it only goes to show that Olam has liquidity problem. That amount which we thought is substantial is nothing .... a drop in the bucket compare to the debts that they are having ..... will go below $1.4

Waiting for MW to make the next statement. Watch and see .....

Think will shit down when XD and after.

14/11 results..

Cheong ah!

jj7007 ( Date: 04-Nov-2013 10:45) Posted:

Funny how people can think that pullbacks after a fast run up means the share is in trouble. Fact is that even at 1.495 its still higher that 1.445 when it ran last week. I rather there is profit taking and consolidation on the table so that there is room for more sustain price appreciation.

People wanna hear what they wanna hear and believe what they wanna believe. Thats why we all lose $ in stocks hahaha

Shortist also must cover position one, olam can be illiquid at times so good luck to them.

Finally someone that sees things my way!

Long Olam!

jj7007 ( Date: 04-Nov-2013 09:37) Posted:

Olam high debt? this is very old news lah, way before the stupid angmorican announced he was shorting it. It has always been very high geared since 5 yrs ago, and paying very high interested on some syndicate loans but hey they are making $.

At the price, they are actually still lagging the market.

Me sold at 1.595 and started buying back slowly from 1.51 and below. Was a little excited and went in a little early. Having said that, i'm no big time punter or contra player, so price dips don't kill me.

Positioned for a nice year end rally

Lol, pretty excited. I have been waiting for months for this moment.

mystical ( Date: 03-Nov-2013 01:44) Posted:

Hope you don't mind, I just want to join in your discussion as it is very interesting.

_____

Olam was heavily shorted on 1 Nov. of the 3.5M vol sold and 3M was from short selling vol. With the average trading price between $1.5 to $1.49. around 3M vol. I suspect that 50% of the short seller has not recovered their position.

On monday 4 Nov, I expect the counter price to shoot back between $1.53 to $1.54 for the 1st 10mins and stabilize around that range. Olam's dividend is still consider quite attractive.

I don't know your risk appepite and amount of capital. But I suggest you diversify your portfolio and limit the weightage you place on this counter.

Though I see high potential on this counter. But I agree with them on the amount of risk needed to undertake too.

SO do your own due dilligence.

danytan ( Date: 01-Nov-2013 10:04) Posted:

Sis, are you vested in olam?

Correct if you are referring to survival. But look at its share price... it is still less than half the pre GFC high.

jwblue ( Date: 01-Nov-2013 10:50) Posted:

Debt is not an issue as long as there is enough cash flow and a source of funding.

Olam seems to have both.

Had it not for Temasek backing I see the px going down to 40c.Bcos of its enormous debt otherwise some gd knight cld have taken her private long time ago.

Octavia ( Date: 01-Nov-2013 08:40) Posted:

Muddy Waters: Game over for Olam if Temasek pulls out

Almost a year after it first released its report on Olam International, shortselling research firm Muddy Waters is not letting up on the agri-commodities trader yet.

" My view is that if Temasek decides tomorrow that it wanted out of this investment, it would be game over within months for them, without Temasek's backstop," its research director Carson Block told The Business Times in his first visit to Singapore since launching its report against Olam last November.

" For us, the be-all and end-all when we're looking at Olam is free cashflow. It's a company that seems to be in general wholly-incapable of generating free cash flow. It takes on more and more debt, and eventually, this debt has to be repaid."

The shortseller had late last year accused Olam of relying on accounting tricks to boost its bottomline, spending too much on poor quality assets, and said it valued Olam on a " liquidation basis" .

The attack, the first of its kind in Singapore, caused Olam's shares to fall 20 per cent to a low of $1.395 at the height of the saga, and subsequently led to an overhaul of Olam's plans after a strategic review.

The firm said that it now aims to be free cashflow positive from the 2014 financial year onwards, a year earlier than its original target of FY2015, and has laid out plans to cut planned capital expenditure, monetise its balance sheet and divest certain assets.

Mr Block said of these: " The company's saying the right things. The question is whether it actually does those things. It might have become slightly more selective, but you still see substantial cash burn in the company."

" Maybe they can finance their way out of it, however many more times, but there will come a day - it might be sooner, it might be later - when the market will not be open to this company."

In August, Olam reported a negative free cashflow of $316 million for the 2013 financial year, compared with negative $661 million a year before.

Olam's net gearing now stands at 1.93 times, as compared to 2.20 times the previous quarter, and 1.81 times at the end of FY2012.

When asked if Muddy Waters still retains a short position on the firm, Mr Block said it does not usually comment on its positions aside from the release of its reports.

But in a hint that Muddy Waters is still short on Olam, he added: " Obviously we're usually used to winning within a shorter period of time. Fortunately for many of the names we've shorted in the past, we haven't really had to think to answer that question. Olam is different."

Shares for Olam, and Muddy Waters' target after that, US cellphone antenna operator American Towers, had not dropped as much as the shortseller's earlier targets, leading to talk that its influence has faded.

In a sign that its streak of lacklustre results is ending, however, Muddy Waters' latest report launched last Thursday against Chinese mobile services provider NQ Mobile led to its shares falling more than 60 per cent within an hour.

Temasek moving into the ring to support Olam was a move that the shortseller had not foreseen, Mr Block admitted.

" We looked at it from a purely economic standpoint, which is that it is not an investible company, and maybe we ignored the political elements of this, the psychological element, the issues that were more systemic in Singapore that could interest a sovereign in a bailout," he said.

Two weeks after Muddy Waters spoke out against Olam, Temasek, then the firm's second-largest shareholder, threw its weight behind Olam by agreeing not just to take up its pro-rata entitlement of Olam's US$1.25 billion bonds-cum-warrants rights issue, but also sub-underwrite it. The issue was eventually 1.1 times subscribed.

Temasek has also since then progressively increased its ownership of Olam, from an initial 16.3 per cent before the Muddy Waters attack to 24.07 per cent now.

In Mr Block's view, Temasek had stepped in because of the wider implications that an Olam collapse would have posed to the commodity-trading industry in Singapore.

" If Olam had failed, what would the banks have done with the other commodity houses that are borrowing in Singapore?" he said. " It's reasonable to assume that if the banks had to write off losses to Olam, you could have a real funding freeze for the commodity trading industry in Singapore. "

Temasek's spokesman Stephen Forshaw said the Singapore investment company's reason for investing in Olam remained the same: " We have been, and remain, supportive of its publicly known strategy to take the opportunity, in recent years, to add on more upstream and midstream capabilities and capacities.

" We also acknowledged that no business is without risks. But that said, at the time of the investment, we were comfortable with Olam's credit position and longer term prospects, and were very pleased to have another opportunity to invest in the company, alongside others."

Debt is not an issue as long as there is enough cash flow and a source of funding.

Olam seems to have both.

Login Register

OLAM_OLAM