What is Sunny Verghese planning to do with almost $1 billion?

Olam International Limited intends to raise up to S$494.53m of gross proceeds via shares placement onsisting of; (1) private placement of 94.4m new shares at S$2.60 each to institutional and other investors; (2) pro-rata and non-renounceable preferential offering of 97.3m new shares at S$2.56 each to entitled shareholders on the basis of one preferential share for every 22 existing shares. The offer prices represent discounts of 8.4% and 9.8%, respectively. Separately, Olam announced that Temasek Holdings has agreed to subscribe for 94.4m new shares at S$2.60 each, raising another S$245.5m of net proceeds.

All in, Olam expects to raise as much as S$740m, which it intends to use 50% on potential acquisitions in the future; 30% on capex; 20% on general corporate purposes. The overall exercise is likely to increase its existing share capital by 13.4%. Meanwhile, please note that we are in the process of reviewing our previous BUY rating and S$3.53 fair value due to the change in analyst coverage.