Savola rights issue, Almarai stake distribution cover 4 key elements

Logo of Savola Group

Savola Group stated that its rights issue and stake distribution in Almarai Co. represent an interconnected process that includes four key integrated elements.

These elements include a capital increase through rights issue, debt repayment, capital reduction, and distribution of Savola's entire stake in Almarai to eligible Savola shareholders.

The aim of disclosing information in this manner was to provide shareholders with an overview of the interconnected relationship between the four elements of the process, as Savola explained in a statement to Tadawul.

The first element is to issue SAR 6 billion worth of rights shares, then using the proceeds to repay debts and strengthen the company's financial position to support future business growth in its two main segments, food and retail.

The capital reduction aims to enable Savola to distribute its entire stake in Almarai, amounting to 34.52%, to eligible shareholders, according to the statement.

Savola noted that the transaction is subject to the approval of the regulatory authorities and the general meeting.

The company confirmed that its operations generate enough cash to meet its existing financial obligations, including debt covenants and lender terms.

The main aim of Almarai share distribution, Savola said, is to unlock value for its shareholders, who will benefit from direct exposure to the growth potential and future dividends while continuing to pursue the future growth and value creation of its portfolio.

The company indicated that any relevant developments will be duly revealed after completing the necessary studies and analyses, as well as obtaining the regulatory approvals, in alignment with the regulations of the Capital Market Authority (CMA) and the Saudi Exchange (Tadawul).

The related financial impact cannot be determined at present, but will be announced in due course, Savola noted.