Olam announces one-day exchange offer for 1% convertibles

By Angela McDaniels

Tacoma, Wash., Feb. 17 - Olam International Ltd. is offering to issue new U.S. dollar-denominated 1.2821% convertible bonds due July 3, 2013 in exchange for its $176.4 million outstanding 1% convertible bonds due July 3, 2013, according to a company notice.

Holders will receive a principal amount of new convertibles equal to 78% of the principal amount of 1% convertibles accepted for exchange. Accrued cash interest will not be paid.

The exchange offer began at 7 p.m. ET on Feb. 16 and was scheduled to expire at 7 p.m. ET on Feb. 17. The settlement date is expected to be March 2.

The new convertibles' redemption amount at maturity will be 151.5.

The conversion price of the new convertibles is S$1.656 per share, which is a 20% premium to Feb. 13's closing share price of S$1.38.

The conversion ratio is 90,984.3 shares per bond. The ratio is based on a face amount of $100,000 per convertible and a fixed exchange rate of 1.5067 Singapore dollars per U.S. dollar.

The new convertibles will be putable at 141.025 on July 3, 2011.

Olam can force conversion of the new convertibles at any time between July 3, 2010 and July 3, 2011 if the volume-weighted average price of its shares, translated into U.S. dollars at the prevailing rate, is at least 140% of the early redemption amount of the new convertibles divided by their conversion ratio for 20 consecutive trading days.

After July 3, 2011, the company can force conversion if its volume-weighted average share price is 130% of the early redemption amount divided by the conversion ratio for 20 consecutive trading days.

The company can issue shares in lieu of cash at maturity and to satisfy any puts exercised.

The company originally issued $300 million of the 1% convertibles in July 2008. It repurchased $117.6 million of them at 65 during a tender offer that expired on Dec. 19 and has since repurchased $6 million additional convertibles on the open market.

J.P. Morgan (S.E.A.) Ltd. is the exchange agent and dealer manager.

Olam is a Singapore-based provider of supply chain management for agricultural products and food ingredients.

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