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Mon 11 Jun 2007 12:43 AM

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Saudi Savola in $4.8 bn expansion

Jeddah-based food company plans to expand across Middle East, North Africa and Central Asia.

Saudi food company Savola Group said it plans to invest 18 billion riyals ($4.8 billion) to expand in North Africa, the Middle East and Central Asia, including through acquisition.

The Jeddah-based company, which owns the Azizia Panda chain of supermarkets in the kingdom, can raise half the funds itself and the remaining half from partners, it said in a statement on Sunday.

"The group will pursue equity stakes in companies in new business sectors across the Middle East, North Africa and Central Asia, as well as seek growth opportunities for existing operations," it said, without being more specific.

"Savola Group has access directly, in cash or through debt instruments, or in strategic partnerships, to funding capacity of approximately 18 billion riyals, which it will use to fund its investments," it said.

The company plans to raise some of the funds in compliance with Islamic law, it said.

Savola, the Gulf's largest food company by market value, in April posted its smallest quarterly profit in a year.

Net income in the three months to March 31 rose 1.3 % to 137.5 million riyals ($36.7 million), or 0.37 riyals per share, compared with 135.8 million riyals, or 0.37 riyals per share, in the year-earlier period.

Shares of Savola fell 0.61 % on Sunday. They are down 12.3 % this year to Saturday's close.

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