Beirut (APD) - Jeddah-based Savola Group received approval from the Saudi ministry of trade and industry to convert its Riyadh-based edible oil subsidiary Afia International Company into a closed joint stock company with a capital of SR 250 million, the London-based daily Asharq al-Awsat reported Monday.
Afia's shareholders subscribed to the full capital of the company which is divided on five million shares with a nominal value of SR 50 per share.
Afia, which is 90.64% owned by Savola, manufactures and markets edible oils. It was established in 1979.
Savola also announced on Monday in a statement to the Saudi Stock Exchange, Tadawul, that it will open a new hypermarket in Jeddah on March 27.
By opening its fifth Hyperpanda market this month, Savola continues implementing its retail department strategy to boost the number of Panda outlets to 100 and Hyperpanda outlets to 25 by 2010, Abdulraouf Mannaa, Savola's managing director, confirmed in the company's statement to Tadawul.
The new hypermarket which is the second Hyperpanda in Jeddah has an area of 13,500 square meters and 40 cash registers.
Whereas the recent downturn on the Saudi Stock Exchange affected the agricultural sector more than other sectors, Savola moreover appeared set to continue expanding by increasing its capital by SR 1.2 billion ($320 million).
The Saudi Capital Market Authority (CMA) last week had approved Savola's request to increase its capital from SR 1.8 billion to SR 3 billion.
The capital increase will be carried out by transferring SR 1.2 billion from the issue premiums reserves and through offering two bonus shares for each three shares held, at a par value of SR 50 per share.
The number of Savola shares would be boosted from 36 million to 60 million shares.
Net profits of Savola more than doubled in 2005 to about SR 1.2 billion compared with SR 502.37 million in 2004.
The company's stock had peaked above SR 2,125 in late February and then followed the market's downward trend to a low of SR 1,378 last week, from which it since rebounded.
Shares in Savola rose by SR 40 or 4.34% to SR 1,720 in late afternoon trading on Monday.
The agricultural index fell by 2.13% on Monday as the only sector to retreat on the day while the Tadawul All Share Index improved by 2.75%, to 16,847.36 points. [TS]
By Shikrallah Nakhoul, APD Staff Writer in Beirut
© APD (Arab Press Digest) 2006
