Yes. Unless Olam is that Catfish with three poisonous sharp thorns to poke anyone trying to catch fish in muddy water.
SINGAPORE: A US
research firm on Tuesday said Singapore-based farm commodities supplier
Olam International faced a "significant risk" of default and likened it
to failed energy trader Enron Corp.
Muddy Waters LLC released a
scathing 133-page report on Olam despite a lawsuit filed against it by
the company, which reported a turnover of S$15.73 billion ($12.30
billion) in its last financial year ending June 30.
Olam on a liquidation basis because we believe its value is less than
its debt, and that it is at significant risk of defaulting on its
obligations," the report said.
"In the event of bankruptcy, our
recovery model shows that recoverable assets for unsecured creditors of
Olam would likely be 45.8 cents to the dollar." Muddy Waters likened Olam to Enron, saying they used similar accounting techniques to value gains.
collapsed in spectacular fashion in 2001 amid wide-ranging government
and congressional probes into its accounting practices in one of the
biggest scandals in US corporate history. "We believe that the
single biggest factor in Enron's collapse was its use of accounting
techniques similar to Olam's value gains," the report said. "Both
companies appear to have tried to scale their trading businesses too
far and too fast, which resulted in substantial cash burns."
In a statement, Olam said it had been informed of the Muddy Waters report.
"Olam will assess the report and respond appropriately in due course," it said.
last week sued Muddy Waters and its founder Carson Block at the
Singapore High Court, citing "slander, libel and/or malicious
Block, an influential short-seller, had told an
investment conference in London earlier that Olam could collapse due to
its debt load and other factors.
Muddy Waters has said it will
"vigorously" defend itself against the lawsuit, issuing Tuesday's report
after the lawsuit was launched.
Shares of Olam closed 6.0 percent lower on Tuesday after the report was released.
sources 44 products from 65 countries and supplies them to more than
11,600 customers. Key products include cocoa, coffee, cashew, sesame,
rice, and cotton and wood products.
Last updated : 14 Sep 2020
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