SINGAPORE, Nov 29 – Singapore agricultural commodity trader Olam International Ltd, under attack by short-seller Muddy Waters for its aggressive spending, accounting practices and debt levels, does not expect to tap the debt markets for at least five to six months, its chief executive said.
“We are not borrowing at this point in time, so we don’t know whether the cost of borrowing has gone up,” Verghese said in an interview today.
Asked when Olam was likely to tap the markets at the earliest, he replied: “Definitely not in the next five to six months.”
“We are very comfortable with our balance sheet position, in terms of our equity position as well as our debt position,” he said.
Verghese, who described the assertions from Muddy Waters that the company is likely to fail as “a bolt from the blue”, said the company’s lenders, investors and trading partners were standing by the company.
Olam has sued Muddy Waters in a Singapore court and issued a detailed rebuttal saying it was not at risk of insolvency and had enough liquidity to pursue its business and investments.
Singapore state investor Temasek Holdings Pte Ltd, which owns 16 per cent of Olam, has said it maintained its position on the company.
Olam’s shares have fallen as much as 16 per cent since the battle with Muddy Waters began early last week, wiping away nearly half a billion dollars in market value.
“When a lot of mud like this is thrown, a lot of people will take the view ‘sell first, we’ll ask questions later,’ which is precisely the impact these aggressive claims were hoping to make,” he said. – Reuters