LT Foods Ltd. has raised nearly Rs 390 crore by selling shares to Saudi Agricultural and Livestock Investment Company (SALIC) through private placement. In a regulatory filing, the company informed that 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 per cent 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.
In addition, SALIC will acquire a 1.33 per cent equity stake through a secondary share purchase from the promoters group.
“Post completion of this transaction, SALIC will hold a 9.22 per cent equity stake in LT Foods. The promoters of the company will continue to hold the majority equity stake of 51 per cent,” the company said in a statement.
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 per cent 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 per cent equity stake in Daawat Foods Ltd.
Further, the company will also enter into a ‘Strategic Supply & Cooperation Agreement’ with SALIC to further support SALIC in its food security agenda along with giving LT Foods significant access to a large market.
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 also give a boost to the company’s future growth plans specifically in the Middle East and Saudi Arabia region.
On the other hand, the deal 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.
LT Foods Chairman Vijay Kumar Arora said: “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.”
“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,” he added.
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LT Foods is one of the leading players in specialty rice and rice food products and organic business. The company portfolio includes a range of power brands that include Daawat, Royal and other regional leading brands.