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United States : TEMASEK-backed OLAM secures $2.2 billion loan

May 21, 2014

Agricultural commodities trader Olam International secured a $2.2 billion 364-day facility from 12 lenders at competitive rates.

Olam came under attack from Muddy Waters in 2012 after its founder Carson Block questioned the company s accounting practises and denounced its debt as unsustainable.

Olam survived the attack once shareholder and Singapore investment arm, Temasek Holdings raised its stake, underlining its support for the company.

Temasek made an offer for Olam in a deal that was valued at $4.2 billion. Breedens Investments offered S$2.23 in cash per share, a 12% premium to Olam s closing price before the bid was made.

The commodities trader, employs more than 23,000 people across 65 countries, had been in talks with lenders prior to Temasek s offer, but the talk was at a standstill before resuming.

Lenders were expected to borrow about $1.2 billion to $1.5 billion but in the end the company raised more as more banks piled in.

ANZ, Commerzbank, HSBC, JP Morgan, Naxtixis, Royal Bank of Scotland and Standard Chartered, mandated lead arrangers. Barclays, Banco Bilbao Vizcaya Argentaria, Rabobank, DBS and National Australia Bank are mandated lead arrangers for the revolving credit facility.

Temasek is in the process of buying out Olam s minority shareholders but the company benefited from the Temasek halo effect.

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Source: TendersInfo (India)

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