Investors exchange 77% of Olam's outstanding CBs

Olam International said yesterday that investors holding a combined $136 million worth of the company's convertible bonds have accepted the offer to exchange the existing bonds for a new CB with a smaller principal and a lower conversion premium. This represents 77% of the $176.4 million outstanding in original bonds and means that the company will be able to book a gain of S$45.08 million $30 million before expenses.

Other reasons for the J.P. Morgan-led exchange offer included allowing the Singapore-based supply chain manager of agricultural commodities to lower its upfront debt-to-equity ratio and to reduce the likelihood that it will have to buy back the new bonds in the future. Whether the latter will...