Saudi Arabia has taken a minority share in Ukraine poultry processor and agri-food group MHP.
The Saudi Agricultural and Livestock Investment Company (Salic) has acquired 12.6% of London-listed MHP after purchasing from the market more than 13.5m of the group’s global depositary receipts (GDR).
MHP confirmed the transaction by Saudi Arabi’s sovereign wealth fund – the Public Investment Fund – via a filing with the London Stock Exchange. No other details such as the price paid for the GDRs were provided.
Saudi Arabia was the destination of an investment and partnership last year with the sheikdom’s Tanmiah Food. MHP entered a hatchery and feed mill joint venture with the group, which holds a majority 55% share in the project.
MHP, which is also engaged in grain production for corn, soya and sunflower seeds, had been struggling to conduct business in light of the ongoing Ukrainian war with Russia.
It has been the recipient of international funding, with the European Bank for Reconstruction and Development (EBRD) supplying a $90m loan last year to support sunflower oil exports.
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By GlobalDataThree global institutions also provided $480m of funds to MHP in 2023 to help the business maintain operations.
Meanwhile, Salic made investment pledges in Brazil last year for meat processor BRF.
Another Brazilian meat business, Minerva Foods, joined with Salic in 2021 to set up a joint venture in Australia whereby sheep processor The Australian Lamb Company was acquired the following year. Other deals by the pair included Shark Lake Food Group Abattoir and Great Eastern Abattoir.
“Whilst the ongoing war continues to impact MHP’s operations, the company has been able to adapt to the challenges of operating in wartime,” the Ukraine group said earlier this month in its second-quarter results announcement.
“Irregular and frequent drone and rocket attacks against civilian, energy and other infrastructure targets have resulted in a challenging and disruptive operational environment, leading to unforeseen war-related costs.”
In the first half of 2024, those costs amounted to $26m, up from $13m in the prior 12 months, MHP said.
Revenue for the six months dropped 4% to $1.5bn, while net profit fell to $45m from $67m.
However, operating profit rose 26% to $192m and adjusted EBITDA increased 21% to $264m.
