Why analysts assume Olam isn't raising money to repay US$600m debt

Even if the debt is due this year.

According to OCBC, Olam International has completed the rights issue of US$750m in principle amount of 6.75% bonds due 2018, which also came with free detachable warrants. 

According to the company, it has allotted 748.428m bonds and 387.361m warrants (recall that existing shareholders have the right to subscribe for 313 bonds and 162 warrants), and the residual amount of 1.572m bonds has been taken up by the joint lead managers as these could not be packaged with the requisite number of warrants.

Here's more from OCBC:

The bonds and warrants will be listed, quoted and traded on the Main Board of the SGX-ST from 9.00am on 31 Jan 2013. For purpose of trading on SGX-ST, each board lot of the
bonds will comprise US$1,000 in principal amount, while each board lot of warrants will consist of 1,000 warrants.

However, Olam has applied and gotten SGX approval for temporary counters to trade the bonds in board lots of US$100 in principal amount and the warrants in board lots of 100 warrants for a 1-month period.

While the full subscription by the major shareholders Kewalram (20.2% stake) and Temasek (20% stake) will provide near-term assurance, several medium- to long-term
issues remain.

Besides scrutinizing future acquisitions plans, we believe that investors will also be following the execution of past acquisitions closely; and Olam can help with more prompt updates. 

Lastly, our model assumes that Olam does not raise more money to repay the US$600m debt due this year. But even then, we are now projecting higher financing cost, which would result in a 13% fall in our FY13 earnings estimate.