SINGAPORE - Singapore-listed agribusiness giant Wilmar International saw its shares plunge on Thursday (Aug 20) after one of its largest shareholders said it plans to sell shares and bonds with a combined value of US$800 million (S$1.1 billion).
Disclosing the move on Wednesday, Chicago-based grain trader Archer Daniels Midland Co (ADM) said it 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 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 $4.40 per share.
ADM said it expects to use the net proceeds from the block trade for meeting its working capital requirements, funding its capital expenditures and a possible buyback.
In addition, ADM unit ADM Ag Holding is offering about US$300 million worth of zero coupon bonds exchangeable for Wilmar ordinary shares to investors outside the US.
Wilmar shares sank as much as 52 cents or 10.7 per cent to $4.34 soon after trading opened, and closed down 50 cents or 10.3 per cent to $4.36.
Some 236.4 million shares changed hands, compared to the counter's three-month average trading volume of 163 million shares, making Wilmar the most heavily traded counter on the Singapore Exchange on Thursday.
During the midday trading break on Thursday, Wilmar said that other than the ADM announcement, it was not aware of any other reason for its share price volatility.
It added that its Chinese subsidiary, Yihai Kerry Arawana Holdings, 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.
