JEDDAH, 26 April 2005 — One of the most familiar names in the Saudi food sector went public yesterday. Saudia Dairy and Foodstuff Company (SADAFCO), a leading long-life dairy and foodstuff company in Saudi Arabia, gave Saudi investors to subscribe for shares.
The initial public offering (IPO) of 30 percent of SADAFCO shares opened at a SR260 per share and is limited to Saudi nationals and select qualified mutual funds that submitted bids for shares set aside for institutional investors. Public investors have ten days until applications close.
SADAFCO managing director, Ahmed Mohammed Hamid Al-Marzouki, said “the IPO represents a major step forward for SADAFCO and provides an opportunity for investors to share in the success of a company that has a solid track record of growth and profitability, year after year.”
The benefits for SADAFCO of listing on the Saudi Arabian Stock Exchange include greater disclosure of operations and financial performance. “This will result in a higher profile and an improved ability to raise capital in the future,” Al-Marzouki said.
The SADAFCO offer consists of 30 percent of its issued share capital totaling 1.95 million shares. Ninety percent — 1.75 million shares — will be available to individual investors.
In accordance with Saudi Arabian corporate regulations and to facilitate the conversion to joint stock company status, the majority shareholder reduced its holding to 49 percent.
The company was established in 1976 with the formation of Danish Saudi Dairy Company, a joint venture between Saudi businessmen (48 percent), Kuwaiti businessmen (48 percent) and Danish Turnkey Dairies (4 percent). Production began in 1977 in Jeddah.
In a steady expansion program, the company acquired the Saudi Danish Dairy Company of Riyadh in 1987 and in 1991 merged with Gulf Danish Dairy Company and Medina Danish Dairy Company.
Since 1991, the company has expanded the product range from milk related products with the introduction of tomato paste, cheeses, hommos, water and snacks by the acquisition of specialist producers.
SADAFCO has five factories in the Kingdom and two in Egypt. It produces milk, flavored milk, juices, ice cream, water and snacks.
Prospectus and Applications will be available for collection from local branches of the lead manager, the National Commercial Bank (NCB) or branches of the other receiving banks: Samba Financial Group, Al-Rajhi Banking and Investment Corporation and Banque Saudi Fransi (BSF).
A spokesman for SADAFCO said at the close of the first day of trading that under the rules of the Capital Market Authority (CMA), comment on any aspect of the first day’s share issuance was forbidden. The first reactions from the company will be available today.