SINGAPORE, March 28 - Singapore commodities firm Olam International said on Friday it aimed to raise up to S$307 million ($222.3 million) in a preferential offering of 155.6 million new shares to investors.
The offer price of S$1.97 is at a discount of 4.8 percent to Olam's last traded stock price of S$2.07, with one new share offered per 10 existing shares held.
Olam said in a statement the proceeds would be used to finance investments, joint ventures, mergers and acquisitions, as well as to discharge or reduce certain bank borrowings and loans.
The move comes after a Merrill Lynch downgrade sparked a sell-off in Olam shares pulling them down by about 14 percent on Wednesday -- their biggest single-day fall ever.
Olam shares were suspended from trade on Friday.
Merrill Lynch issued a research report dated March 25 that advised investors to sell Olam shares, citing the agricultural commodities supplier's high 460 percent net gearing as unsustainable.
A week earlier Olam shares had taken another plunge, falling 12.6 percent on March 19, amid market talk that Olam has exposure to MF Global, the world's largest broker of exchange-listed futures and options, whose shares have been hit by speculation over liquidity problems.
Olam, however, said MF Global accounted for less than 3 percent of all of its hedging activities.
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