RIYADH — Raha AlSafi Consortium and the AlRajhi–Ghurair–Masafi Consortium bids proved the winning bids in the flour milling industry privatization process on Wednesday, with full divestment of the “First Milling Company” and the “Third Milling Company” to qualified strategic investors.

The National Center for Privatization and PPP (NCP) and the Saudi Grains Organization (SAGO) announced this while stating it has completed the first set of the flour milling sector privatization.

The final binding financial bids were submitted on July 5, 2020 upon completion of due diligence during the bidding phase.

The award of each milling company was decided based on the highest financial bids submitted by qualified strategic investors, which were thoroughly reviewed to ensure adherence to the terms stipulated in the Request for Proposal for the first batch of the privatization.

The award of First Milling Company went to Raha AlSafi Consortium who submitted a bid amounting to Saudi riyals two billion and twenty-seven million only (SR2,027,000,000) which constituted the highest bid submitted to this company.

The award of Third Milling Company went to AlRajhi–Ghurair–Masafi Consortium who submitted a bid amounting to Saudi riyals seven hundred fifty million and five hundred forty five only (SR750,000,545) which constituted the highest bid submitted to this company.

The completion of the sale and transfer of ownership to the winning bidders is subject to a number of customary legal requirements and conditions, which must be met before the transaction is closed.

The successful award of the sale of the Milling Companies in the first set of the privatization reflects the attractiveness of Saudi Arabia’s flour sector to investors; considered one of the biggest markets for flour in Middle East and North Africa.

The flour and milling industry is characterized by high and attractive growth rates and potential to enhance sector productivity and further increase products quality.

Following the first phase of the privatization of the industry, the qualification phase for the second and final stage of the privatization of flour milling sector will launch shortly.

This phase will include the sale of the “Second Milling Company” and “Fourth Milling Company”.

The flour milling sector represents one of the targeted sectors for full privatization under Saudi Arabia’s Vision 2030, and is one of the initiatives under the third pillar of the privatization program document.

The privatization of the flour milling sector enjoys the support of specialized regulatory and executive authorities led by the Ministry of Environment, Water and Agriculture, the NCP and related entities.

The Saudi Grains Organization, the regulator of the milling sector and main importer and supplier of wheat, barley and other grains to the milling companies in the Kingdom, wished the winning consortiums success in managing the companies.

HSBC Saudi Arabia, meanwhile, is acting as the sole financial advisor on the privatization of the milling sector. — SPA