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seems no one is currently interested in this.. im looking into this now.. maybe some of u would like to take a look too ;)
Olam International said it will use proceeds from recent equity and bond offerings to complete previously-announced acquisitions and investments in New Zealand and in Africa.
The company completed an equity offering of more than 155.6 million shares at $1.97 apiece on April 22 and a convertible bond offering of US$300 million on July 3, Olam said in a statement to sGX.
Olam plans to use the funds to buy a 24.99% stake in New Zealand-based Dairy Trust Ltd. and 20 percent of PureCircle Ltd. in Africa, the statement said. Additional funds will be spent on palm oil, rubber and sugar assets in Africa, it said.
Moving back up, hitting a high@ $2.27 late morning 
Any latest news? Notice TA indicates oversold.
News of Olam's purchase of 25% stake in Dairy Trust, giving it immediate entry into NZ dairy industry, not making much impact on share price; possibly because earnings contributions not significant in near term, considering Dairy Trust's net profit forecast of US$9.8 million for FY ending July 2009. Still, Daiwa, which has Buy call with $4.01 target, says investment "superb" strategic fit for Olam, offering secure upstream supply source, low-cost procurement market from which to generate geographic arbitrage profits.
The acquisition indicates its deal pipeline remains strong says Credit Suisse. Broker says deal marks largest transaction since US$300 million convertible bond issue, follows hot on heels of Ivory Coast cotton gin investment, PureCircle JV deal with Wilmar. Broker notes New Zealand is world's largest exporter of dairy products, deal allows Olam to leverage on Dairy Trust's strong supplied relationships. But acquisition has only marginal impact on earnings estimates; ups FY09, FY10 forecasts by 1%, 2%, respectively. Maintains Outperform rating with unchanged $3.65 target price.
Olam International said Tue it will pay NZ$101.05 million (US$76 million) for a 24.99% stake in New Zealand-based Dairy Trust Ltd.
Olam expects to raise the stake in the dairy producer to 30% after receiving approval from a New Zealand regulator, it said in a statement.
The initial 24.99% stake makes Olam the second-largest shareholder in Dairy Trust, which entitles it to two seats on the company''s board.
Olam will also enter a long-term marketing agreement for a higher percentage of Dairy Trust's milk product output.
Dairy Trust also intends to make an open offer for all shares in Open Country Cheese Company Ltd. that it doesn't already own.
Olam has agreed to sell its 19.9% stake in Open Country Cheese to Dairy Trust as part of the agreement.
Olam rose as market digests recent news of JV with Wilmar to buy 20% stake in PureCircle for US$106 million. JP Morgan says such M&A moves likely to boost commodity trader's earnings momentum, may lead to earnings upgrades; "the latest strategic 20% stake in PureCircle could lead to a further 8% upgrade to FY09 EPS, if consensus estimates on PureCircle prove correct." Reiterates Overweight call with $3.70 target unchanged.
Cazenove ups fair value for Olam to $4.00 from $3.40, based on 2-stage economic profit model and implying 24X forward P/E; keeps Outperform call. Latest JV with Wilmar to buy 20% of natural sweetener maker PureCircle shows Olam's ability to think "outside the box" when looking at adding new farm product capabilities, allowing it to increase exposure to upstream agriculture; forecasts earnings CAGR of 33% over FY08-11, noting scope for continued strong growth after this period.
World sugar prices, which have been a laggard in the global commodities complex rally, are likely to rise over the next 12 months, driven by demand from bioethanol producers, Olam CEO Sunny Verghese said Wed.
"Sugar prices are likely to have an upside in the next 12 months as sugar is diverted into ethanol production," said Verghese.
"Sugar is a more efficient source of bioethanol than corn," he said.
The cost of producing the same amount of bioethanol from sugar is less than half that of corn.
ICE Oct world sugar settled 62 points higher Tue at 13.72 US cents a pound, and the Mar '09 contract rose 50 points to 15.12 US cents.
Verghese expects sugar demand to rise this year, with the growth rate for this year around or in excess of 3%, compared with an annual compound growth rate of 2%-3% over the past 10 years.
Olam announced Wed a joint investment in a high-intensity sweetener producer which produces the zero-calorie sweetener from the stevia plant and has a market expected to grow around 4% per year.
"The diversion of sugar into ethanol increases the need for alternative sweeteners," said Verghese.
wat happen to Olam.... not much movement at all after the big fall.....
Olam is out of the running for Australia's Dairy Farmers.
"There is little strategic sense and therefore we have chosen not to make a bid," CEO Sunny Verghese tells briefing. "It is largely a domestic play and largely in the branded business, which is not currently the focus of Olam."
No major surprise in Olam's exit, given offshore players would be unable to benefit from synergies available to local bidders. Decision pits Kirin Holdings-owned National Foods, which this week said it's in talks on a joint bid with NZ's Fonterra, and Murray Goulburn/Parmalat consortium as main contenders. However, Canada's Saputo has also expressed interest in the deal, according to a person familiar with the situation. Although Saputo wouldn't benefit from synergies, it could still outbid the local players if it prepared to pay up for a slice of the Australasian dairy industry.
Dairy Farmers, which owns a range of consumer brands including Coon and Cracker Barrel cheeses and Ski yogurt, formally began a sale process earlier this year. Analysts estimate Dairy Farmers could fetch up to A$900 million.
Verghese said Olam remains keen on looking at dairy assets in New Zealand and Australia for possible acquisitions to bolster its dairy business, but he declined to identify specific targets.
Olam fell, still bogged down by earnings dilution concerns stemming from recent US$300 million convertible bond sale, even as company faces potential bidding pressure for Australia's Dairy Farmers.
Commodities trader said last month it's keen to buy dairy group, which has just granted Fonterra Cooperative Group and National Foods permission to undertake joint bid.
"Dairy Farmers is a very big business. If there are more guys on the table, it must be more competitive," says foreign house analyst.
Olam spokeswoman says company still looking at subject, hasn't submitted any bid, noting progress still preliminary. Olam has been actively eyeing companies to take over, partly prompting concerns of more fund raising, which might depress share price.
Queensland Cotton, which was acquired by Olam in Jul last year, is expected to break even and possibly turn profitable in the upcoming financial year starting Jul 1, CEO Richard Haire said Mon.
Australia's largest cotton supplier has been weighing on Olam's profits since the acquisition, booking $5.2 m in losses in H1 of fiscal year to 6/08, with a projected full year loss of A$13 m-A$14 m.
Such dismal financial results are mainly due to droughts in Australia that have caused its cotton crop this year to dwindle to 126,000 metric tons, its smallest crop in 30 years.
However, based on the Australian Bureau of Agricultural and Research Economics' projection of a 1.2 m bale crop, or 272,400 metric tons, in the next cotton crop to be harvested in 3/09, Haire said: "We expect Queensland cotton to be at or near to breakeven based on that crop."
Abare forecasts the cotton crop harvested in '10 to rebound to 428,000 tons, which will definitely put Queensland Cotton in the black, he added.
When its cotton output was around 680,000 metric tons in '01, prior to Australia's 7-year drought, Queensland Cotton's profits were around A$13 million.
Unlike the rest of the commodities complex, cotton is likely to remain a laggard in this oil-led commodities rally in the short term, as the price of polyester, which is used in synthetic fibres, has remained relatively low.
"The raw material used for polyester is a byproduct of crude oil so low down the chain that it hasn't increased in price that much, and so that's probably the main reason for the low correlation between oil's rally and cotton prices," said Haire.
There has also been a slowdown in demand from major consumer China recently. China had been posting a 5%-6% CAGR in cotton consumption for nearly the past 5 years, spinning around 8 m tons of cotton bales, up from 4.8 m bales 5 years ago, he said.
"China remains our main export market, but we can''t expect such growth rates to continue, as its demand is also driven by the key textile consumer, US. However, Indian cotton consumption is continuing to grow at a rate outpacing cotton production, so overall demand and supply is expected to remain stable," said Haire.
"I''m cautiously optimistic about US economy, and current (cotton) prices have already factored in a softer global demand," he said.
Even though cotton hasn't been enjoying the price rally experienced by grains such as wheat or corn, the current price of Australian cotton, which is around US$400 a bale, is enough to allow a comfortable profit margin for farmers.
"I don''t see a massive substitution effect taking place into wheat and out of other crops. However, I don''t expect to see a major correction in wheat in the near term, prices will stay around US$7 a bushel," said Haire.
"The high price of crude oil has led to a new buyer of grains, the biofuel producers. But, if oil stays above US$140 per barrel, technology will soon come up with cheaper alternatives. Necessity will dictate that we find these solutions," he said.
Rather than growing its cotton business, Haire said the company's priority was to finalize its integration with Olam over the next 12 months.
It is also working on diversifying its portfolio to become a major exporter of Australian wheat, barley and canola to key markets such as Asia and Africa, where Olam has a strong marketing presence, said Haire.
Queensland Cotton expects to export 150,000-250,000 metric tons of wheat, barley and canola in the '09 financial year that starts in 7/08, with the aim of trading around 1 m tons of wheat annually within the next 5 years.
In other words, Queensland Cotton is aiming to account for close to 10% of Australia's export market, estimated at around 12 m tons this year, by '13.
Australia's government passed laws deregulating its bulk wheat export trade from Jul 1. Queensland Cotton will be applying for export accreditation under this new export marketing system.
Queensland Cotton has access to around half of Australia's wheat output through the Mt. Tyson Seeds network it acquired in '03 and its footprint in the major grain producing regions in northern New South Wales and southern Queensland.
"We are on the lookout for opportunities to invest capital in very selective supply chain operations, such as a logistics-type facilities or some first stage processing facilities...we''re certainly looking for those strategic investment opportunities in eastern Australia," said Haire.
However, Haire said that such acquisitions were not likely over the next 2 years.
"We can achieve our objectives organically for the first 2 years, but are continually on the lookout for inorganic opportunities as well," he said.
Olam down as news of Cote d'Ivoire cotton gin buy fails to offset widespread market weakness. Gin can produce up to 20,000 tons, 15% of country's annual cotton lint, annually. "This deal remains consistent with Olam's inorganic growth strategy as it builds out its cotton supply chain in Africa," says Credit Suisse. Adds company likely to pursue more aggressive M&A growth strategy in near term; notes recent convertible bond issue added US$300 m to its war chest. Reiterates Outperform rating, $3.65 target price.
Hi everyone,
How do we purchase bonds ? from banks ? how much is the min qty to purchase ? Thx in advance for your advice. I could not find much information from the net.
yipyip ( Date: 10-Jun-2008 01:17) Posted:
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Olam has won an international bid to acquire a cotton gin in the Ouangolo region of Cote d’Ivoire for US$5.0 million. Olam successfully secured the Ouangolo lot which comprises one cotton gin with an annual ginning capacity of 35,000 tonnes of seed cotton and its related infrastructure, as well as a catchment area of nearly 35,000 hectares that can produce up to 20,000 tonnes or 15 per cent of the country’s cotton lint annually. The Ouangolo gin is the only gin with direct access to the 35,000 hectares of cotton farms currently cultivated by some 15,000 farmers in that region.
Report by DMG.
Olam, a leading global supply chain manager with operations in 56 countries, has recorded a historical 3 yr net profit CAGR of 31%. This has come on the back of its very aggressive expansion programme, both organic and inorganic as well as its focused approach to widen margins.
Olam has successfully raised contribution per ton traded. Inorganic expansion could drive earnings further. Convertible bonds provide funds for more acquisitions ahead. Our DCF valuation gives a $3.20 target price, which works out to 28x FY09 EPS.
laughin to the bank!...2.7! >10c rise in 1 day..smoking
up up up up n awayyyyyyyy!