Time: October 10, 2018
A man looks at dairy products produced by Almarai at a grocery in Riyadh, Saudi Arabia June 2, 2016. Image used for illustrative purpose.
DUBAI – The Gulf’s biggest dairy company Almarai has hired banks including HSBC and First Abu Dhabi Bank to arrange a sale of U.S. dollar sukuk, or Islamic bonds, sources familiar with the matter said on Wednesday.
The sale would mark Almarai’s debut in the international debt markets, as the Saudi Arabian company has so far issued bonds in riyal.
The issue is expected to be of benchmark size, which generally means in excess of $500 million, the sources said.
Almarai’s investor relations office declined to comment on the plan, saying it does not respond to rumours.
According to one of the sources, JP Morgan and Standard Chartered have also been appointed to arrange the sukuk.
Standard Chartered, JP Morgan and HSBC all declined to comment, as did First Abu Dhabi Bank.
Almarai’s chief financial officer told Reuters in May that the company planned to refinance 1.7 billion riyals ($453 million) in sukuk by the third quarter of this year and that it had hired an international adviser to complete the process.
At the end of September the company said it had redeemed 1.7 billion riyals in perpetual senior sukuk, issued in 2013.
Consumer goods companies and retailers in Saudi Arabia have suffered as consumer spending has been curbed by the introduction of a value-added tax, higher energy prices and a fragile labour market.
Almarai and other Saudi exporters have also been affected by the loss of the Qatari market as a result of a regional diplomatic rift between Qatar and Saudi Arabia, the United Arab Emirates, Bahrain and Egypt.
Almarai reported this month that its third quarter net profit fell to 634.5 million riyals, from 667 million riyals a year earlier.
($1 = 3.7506 riyals)