Saudi Investment Fund takes minority stake in Ukraine’s MHP

SAUDI ARABIA – Saudi Arabia’s Agricultural and Livestock Investment Company (Salic) has acquired a 12.6% stake in Ukraine’s biggest poultry producer, MHP. 

The transaction was made through the purchase of more than 13.5 million global depositary receipts (GDRs) from the London market.

MHP confirmed the sale in a filing with the London Stock Exchange. 

The deal, facilitated by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, did not disclose the amount paid for the shares.

This marks another instance of Saudi Arabia investing in the food sector, following a partnership with Tanmiah Food last year.

That collaboration saw MHP enter into a joint venture focused on a hatchery and feed mill project, where Tanmiah holds a 55% stake.

MHP has faced challenges in maintaining its business operations due to the ongoing conflict between Ukraine and Russia. 

The company, which also produces grains such as corn, soy, and sunflower seeds, received a US$90 million loan from the European Bank for Reconstruction and Development (EBRD) in 2022 to support its sunflower oil exports.

Earlier in 2023, MHP secured an additional US$480 million from three international institutions to keep its operations running amidst the turmoil.

Salic has also expanded its investments beyond Ukraine. 

In 2021, it teamed up with Brazilian meat company Minerva Foods to acquire the Australian Lamb Company. 

This was followed by further acquisitions, including Shark Lake Food Group Abattoir and Great Eastern Abattoir. 

Salic also pledged investments in Brazil last year, with meat processor BRF among its targets.

Despite the backing, MHP’s financial performance has been under pressure.

For the first half of 2024, the company reported costs of US$26 million, compared to US$13 million in the previous year. 

Revenue for the six months fell 4% to $1.5 billion, while net profit dropped to US$45 million from US$67 million in the same period. 

However, the company’s operating profit grew by 26%, reaching US$192 million, and adjusted EBITDA saw a 21% increase to US$264 million.

Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE