LT Foods Sells Shares to SALIC Via Preferential Allotment, Raises Rs 390 cr
LT Foods Sells Shares to SALIC Via Preferential Allotment, Raises Rs 390 cr

LT Foods Ltd raised nearly Rs 390 crore by selling shares through private placement to Saudi Agricultural and Livestock Investment Company (SALIC).

In a regulatory filing, the company informed, its board has approved issuance and allotment by way of a preferential allotment on a private placement basis up to 27,408,164 equity shares at a price of Rs 142.23 per share for cash consideration of up to Rs 389.82 crore.

The preferential issuance of 27,408,164 equity shares is equivalent to 7.89 percent equity stake in LT Foods, at Rs 142.23 per share to SALIC, a Saudi Joint Stock Company that is owned by the Public Investment Fund of the Kingdom of Saudi Arabia.

SALIC will in addition acquire a 1.33 percent equity stake through a secondary share purchase from the promoters group.

“Post completion of this transaction, SALIC will hold a 9.22 percent equity stake in LT Foods. The promoters of the company will continue to hold the majority equity stake of 51 per cent,” stated the company.

SALIC is investing a total of Rs 455.5 crore through primary and secondary share purchase.

In a related transaction, LT Foods will purchase a 29.52 percent equity stake in its subsidiary, Daawat Foods Ltd, from SALIC which was acquired in February 2020 through its subsidiary ‘United Farmers Investment Company’.

LT Foods will acquire this stake for Rs 175.8 crore and post completion of the transaction it will hold 100 percent equity stake in Daawat Foods Ltd.

Further, the company will also enter into a ‘Strategic Supply and Cooperation Agreement’ with SALIC to further support SALIC in its food security agenda along with giving LT Foods significant access to a large market.

However, the relevant transactions are subject to necessary regulatory approvals. The equity infusion will accelerate LT Foods’ organic and inorganic expansion plans across business segments, the statement said.

It would further give a boost to the company’s future growth plans specifically in the Middle East and Saudi Arabia region.

The deal, on the other hand, would enable SALIC to have greater exposure to the specialty rice sector and secure larger quantities of specialty basmati rice to the Kingdom of Saudi Arabia.

“Our partnership with SALIC is strategic in nature and goes beyond financial investment. The tripling of investment in LT Foods by SALIC is an expression of their confidence in our ability to grow faster than the market,” said Vijay Kumar Arora, Chairman, LT Foods.

He further added, “Together, we have developed a deep understanding of the needs of consumers in the Middle East related to food products and it will open doors for LT Foods to further strengthen its presence in this segment.”

LT Foods had a consolidated revenue of around Rs 5,451 crore during the last fiscal year.

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