NADEC inks MoU to form consortium to bid for SAGO’s flour mill

Logo of National Agricultural Development Co.

National Agricultural Development Co. (NADEC) signed, on Jan. 11, 2021, a non-binding memorandum of understanding (MoU) to form a consortium to jointly bid for acquisition of a flour mill, the company said in a bourse filing on Tuesday.

The flour mills are being offered for privatization by the National Center for Privatization & PPP (NCP) and the Saudi Grains Organization (SAGO).

According to a bourse filing, the company signed a MoU with OLAM International Limited, Al Rajhi International for Investment Co., and Abdulaziz Alajlan & Sons Co. for Commercial and Real Estate Investment for the purpose of submitting a bid to acquire the mill.

The move is part of NADEC’s plan to develop, grow, and play its role in achieving food security.

The joint bid’s value will be determined by the agreement of the parties and after completing the financial and legal due diligences on the mill.

The conclusion of the joint venture agreement and the incorporation of the holding company will be pending on the acceptance of the bid by SAGO and awarding of the mill to the consortium.

The ownership percentage of the parties in the holding company will be determined after SAGO accepts the bid and awards the mill to the consortium.

The MoU is effective from the signing date until the date of its termination or expiry in accordance with the applicable terms of the agreement.

NADEC Vice-Chairman Ibrahim Abuabat is a related party as he is a board member in Al Rajhi International for Investment Co.

The financial impact will be announced upon signing the definitive agreement, the statement noted.

As part of the Kingdom's Vision 2030, NCP and SAGO intend to privatize two flour mills, aiming to enhance the utilization of government assets, improve their operational efficiency, attract local and international investments, raise the private sector’s contribution to the domestic product, as well as support the local market in general.

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