DUBAI: Savola Group, Saudi Arabia's largest food products company, confirmed on Tuesday it had raised 1 billion riyals ($267 million) in sukuk, or Islamic bonds, in a deal arranged by the Saudi arm of HSBC.
Savola made the deal public in a bourse filing, confirming what sources familiar with the matter had earlier told Reuters.
Savola and other consumer goods companies in Saudi Arabia are suffering from the effects of subsidy cuts, the introduction of VAT sales tax and an exodus of expatriates, which have all put pressure on consumer spending.
The company had said in May it planned to issue the bonds to back its financial and strategic needs.
Savola's bonds, issued last week, offer investors a profit rate equivalent to 160 basis points over the 6-month Saudi interbank offered rate.
One of the sources said the deal was priced at the level at which it was initially marketed, which is unusual in bond markets, where new issues tend to price below initial price guidance, reflecting demand.
A spokesman for Savola referred to the company's filing, which said subscription requests for the new bonds exceeded the issuance value by more than 1.6 times.
HSBC declined to comment.
Around half the value of the privately placed sukuk, with a seven-year maturity, was exchanged with previous Islamic bonds issued by the company, Savola said.
Savola's issue comes after Saudi Arabia this year reduced fees for new debt offerings and annual registration charges for issuers, as part of efforts to spur local market activity. ($1 = 3.7503 riyals)
Saudi Arabia’s Savola issues 1-billion riyal sukuk
Saudi Arabia’s Savola issues 1-billion riyal sukuk
Saudi Arabia merges National Competitiveness Center and Saudi Business Center
RIYADH: Saudi Arabia has merged the National Competitiveness Center and the Saudi Business Center under a unified entity named the Saudi Competitiveness and Business Center to streamline business reforms.
The decision was announced during the Cabinet session held in Jeddah on Feb. 24 and chaired by Crown Prince Mohammed bin Salman.
Majid Al-Kassabi, minister of commerce and chairman of the boards of both centers, praised the leadership’s continued support for the private sector, saying the merger will enhance Saudi Arabia’s competitiveness and elevate its ranking in relevant international indicators and reports.
He said the decision will enhance the Kingdom’s competitiveness and elevate its ranking in relevant indicators and reports. It will also facilitate procedures for starting and conducting economic businesses and provide all related services and work by adopting the best international methods and practices.
Al-Kassabi said the Saudi Competitiveness and Business Center will continue delivering more than 6,000 government services to the business sector, in integration with relevant government entities, at the highest levels of quality and innovation. Services will be provided through the unified business platform and 20 branches across 15 cities.
He said the merger will unify channels for monitoring challenges facing the private sector and implement targeted reforms to facilitate business, adding that it will enhance the Kingdom’s global competitiveness and maximize the benefits of partnerships with local and international entities and organizations, especially in knowledge transfer and the exchange of expertise.
He said the center will work with the public and private sectors to place the Kingdom among the world’s most competitive countries and make its business environment a global model for the quality, smoothness and efficiency of government services directed to the business sector.
