Savola aims to claw back revenues through Almarai share sale
The Saudi food manufacturer stands to gain SAR1.1bn (US$300m) by reducing its shareholding in Almarai to 34.52% from its current 36.52%.
The windfall will be well received by Saudi Arabia’s biggest food products company, which has been enduring a difficult year.
Savola, whose business interests also span the agriculture and retail sectors, reported a 96% fall in first-quarter net profit due to lower sales and tightened retail margins.
Net profit in the three months to March 31 was SAR4.8m, compared with SAR119.4m in the same period a year earlier.
It made gains in the second quarter, however, though its net profit was still well shy of 2016 levels.
Adjusting for a one-off gain of SAR62m riyals from the sale of its Hyper Panda store in Dubai, Savola’s net income was SAR167m, down 34% of a year ago.
Retailers in Saudi Arabia have faced challenges over the past year or so as a protracted slump in oil prices put government and consumer spending under pressure.
In July, Almarai reported a first quarter net profit of SAR328.3m, up 13.7% from the prior-year period.
Savola has told the Saudi stock exchange that the transaction will be done through an accelerated book-building process. The completion of the transaction remains subject to the successful execution of the special trades settlement.
If the deal goes through successfully, Savola will record a profit of SAR694m during the third quarter of 2017. It intends to use the proceeds of the sale for general corporate purposes, it said in the bourse filing.
