RIYADH, 9 February 2006 — Saudi Arabian food heavyweight Savola said on Tuesday it would float part of its edible oil firm Afia International Co., which has an annual turnover of about $400 million.
“We have not decided yet when and how much a stake will be floated but it is planned,” a Savola spokesman told Reuters.
Market sources said Savola plans to float 30 percent of Afia’s capital this year on the Riyadh bourse, but the Savola spokesman said that may be decided at an Afia shareholders assembly.
“The assembly may decide on a date and size of the flotation,” the spokesman said.
Savola holds a 90 percent stake in Afia, which had a turnover of about SR1.6 billion ($426.7 million) in 2004.
“Savola will still keep control over Afia ... after the flotation, which will benefit of the abundant liquidity in the bourse and help the company expand to new markets,” said a fund manager familiar with the plan. “The firm’s turnover grows by an annual 15-20 percent thanks to a strong distribution network and a growing presence abroad,” the fund manager said.
Afia’s products account for around 70 percent of the Saudi edible oil market and it has operations in Egypt, Kazakhstan, Morocco and Sudan.
Savola, one of the ten largest firms on the Saudi bourse, has reported a net profit of SR1.2 billion for 2005, up 139 percent from 2004. In 2004 it floated a 30 percent stake in its dairy unit Almarai.
