Saudi Agricultural and Livestock Investment Company (SALIC), a wholly-owned subsidiary of the Public Investment Fund (PIF) of the Kingdom of Saudi Arabia, has acquired a 9.22% stake in publicly-listed LT Foods for Rs 390 crore.
"The Board of Directors of LT Foods in its meeting today approved the preferential issuance of 27,408,164 equity shares, i.e. 7.89% equity stake in LT Foods, at Rs. 142.23 per share to SALIC... In addition, SALIC will acquire a 1.33% equity stake through a secondary share purchase from the Promoters Group. Post completion of this transaction, SALIC will hold a 9.22% equity stake in LT Foods. The Promoters of the Company will continue to hold the majority equity stake of 51%," LT Foods said in an exchange filing.
LT Foods will also purchase a 29.52% equity stake in its subsidiary, Daawat Foods Ltd., from SALIC which was acquired in February 2020 through its subsidiary ‘United Farmers Investment Company'.
LT Foods will acquire this stake for ₹175.8 crore and post-completion of the transaction it will hold a 100% equity stake in Daawat Foods Ltd.
The company said the transaction will reflect a partnership between LT Foods and SALIC as the equity injection will accelerate LT Foods’ organic and inorganic expansion plans across business segments, and give a boost to its future growth plans specifically in the West Asia and Saudi Arabia region.
On the other hand, it will enable SALIC to have greater exposure to the Specialty Rice sector and secure larger quantities of Specialty Basmati Rice to the Kingdom of Saudi Arabia, it said in the filings.
“Our partnership with SALIC is strategic in nature and goes beyond financial investment. The tripling of investment in LT Foods by SALIC is an expression of their confidence in our ability to grow faster than the market. Together, we have developed a deep understanding of the needs of Press Release consumers in the Middle East related to food products and it will open doors for LT Foods to further strengthen its presence in this segment,” Vijay Kumar Arora, chairman, LT Foods.
The filing stated that LT Foods will into a strategic supply and cooperation agreement with SALIC to further support SALIC in its food security agenda along with giving LT Foods significant access to a large market.
“The extension of our partnership with LT Foods is in-line with SALIC’s strategy to contribute to the food security objectives. Our 3 years old investment in Daawat Foods Ltd., gave us an understanding of the management style of LT Foods, their market and business understanding and their deep commitment to sustainability, and innovation to always serve its consumers better. This gave us the confidence to increase our investment in LT Foods and build a strong strategic partnership with the Company,” said Sulaiman AlRumaih, group CEO of SALIC.
Avendus Capital and Kotak Investment Banking acted as exclusive financial advisers to LT Foods and SALIC respectively. Additionally, AZB & Partners and Cyril Amarchand Mangaldas acted as exclusive legal advisers respectively.
LT Foods has consolidated revenue of around Rs. 5,451 crore as on FY22. it has strategically located processing units in India, the US and Europe, and a distribution network with over 1,300 distributors across the globe.
SALIC was established by Royal Decree in 2009 as a Saudi joint stock company owned by the Public Investment Fund. Since 2012, SALIC has partnered with companies in the field of agriculture, grain trading, rice, and red meat in Ukraine, Canada, India, Australia, Brazil, Singapore, and The United Kingdom.