Hot stock: Wilmar sinks 10% after major shareholder reveals plans to cut stake

SHARES of agri-food giant Wilmar International fell 10 per cent on Thursday morning after one of its largest shareholders, Archer Daniels Midland (ADM), announced plans to sell off shares and bonds worth US$800 million.

Wilmar shares dropped to an intraday low of S$4.31. They were trading at S$4.34 as at 1.50pm, down S$0.52 or 10.7 per cent from Wednesday's close, with 216 million shares changing hands.

The counter was the most actively traded both in terms of volume and value on the Singapore bourse as at 1.50pm on Thursday.

ADM on Wednesday said two of its units will undertake the proposed sale of 170.5 million Wilmar shares for about US$500 million, pursuant to a secondary block trade agreement with a syndicate of managers.

The shares represent 2.68 per cent of Wilmar's total issued share capital and have been priced and placed at S$4.40 per share.

The Chicago-based grain trader expects to retain at least a 20 per cent stake in Wilmar. The company had a 24.6 per cent effective stake as at March 4, according to Refinitiv.

ADM unit ADM Ag Holding also aims to conduct an offering of about US$300 million worth of zero coupon exchangeable bonds outside the US, the grain trader added.

On Thursday afternoon, Wilmar said that other than the ADM announcement, it was not aware of any other reason for the share price volatility.

It added that its 99.99 per cent-owned Chinese subsidiary, Yihai Kerry Arawana, has submitted an updated prospectus to the China Securities Regulatory Commission (CSRC) for final registration approval for listing on the Shenzhen Stock Exchange ChiNext Board.

Final registration approval from CSRC is pending, Wilmar added.