LT Foods will also enter a Strategic Supply and Cooperation Agreement with SALIC.
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Saudi Agricultural and Livestock Investment Company (SALIC), a joint stock company owned by the Public Investment Fund of Saudi Arabia will invest a sum of Rs 455.5 crore in LT Foods through a strategic partnership.
The board of LT Foods approved the preferential issue of 2.74 crore shares or 7.89 percent of the total equity at Rs 142.23 per share to SALIC.
Additionally, SALIC will also acquire 1.33 percent equity through a secondary share purchase from the Promoters Group.
SALIC will own 9.22 percent stake in LT Foods post the transaction. Promoters of the company will continue to hold a majority stake of 51 percent.
LT Foods will acquire 29.52 percent stake in its subsidiary Daawat Foods from SALIC, which it acquired in February 2020 through its subsidiary United Farmers Investment Company. The stake will be purchased for Rs 175.8 crore, post which Daawat Foods will become a wholly-owned subsidiary of LT Foods.
The company will also gain access to a much larger market as it enters into a Strategic Supply and Cooperation Agreement with SALIC to support the latter in its food security agenda.
The transactions are subject to regulatory approval.
The management of LT Foods believes that the partnership with SALIC will enable the company to strengthen its presence in the market.
Shares of LT Foods are trading 4.4 percent lower at Rs 120.45. The stock has gained nearly 60 percent this year.