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Update: Hot stock: Olam sees heavy trading
SHARES of Olam International fell 3 cents to S$1.955 as at 9.46am on Tuesday with some 222.1 million shares changing hands.
In a statement on Aug 28, the agri-business said it will issue 332.7 million shares to Japan's Mitsubishi Corp at S$2.75 apiece, or about 12 per cent of the company's enlarged share capital. Separately, the Japanese conglomerate also said it will acquire about 222 million secondary Olam shares from the founding members of the Kewalram Chanrai Group at the same price.
After these transactions, Mitsubishi will become Olam's second-largest shareholder with a 20 per cent stake after investment firm Temasek Holdings. The deal will also dilute Temasek's stake in Olam to 51.4 per cent, from 58 per cent.
Separately, it was also announced earlier this month that Olam would be dropped from the benchmark Straits Times Index (STI) due to new liquidity rules. STI component stocks now must trade at least 0.1 per cent of their issued shares, up from 0.05 per cent, based on their median daily trade for 10 of the 12 months before a review date, which could be in March or September.