The initial public offering (IPO) by Baladna Food Industries (BFI), which recently announced to offer 75 percent of the Share Capital to raise QR1.42bn, is a great opportunity for investors in Qatar, noted a senior official of the company.
The subscription period for the IPO of 1,425,750,000 new shares (the Offer Shares) will start in less than a week’s time on October 27 to November 7, with the first day of trading at QSE expected on December 11, 2019.
“This is a great opportunity for the local investors being offered by Baladna, which has written one of the most successful stories in Qatar in terms of achieving self-sufficiency in dairy products within a record time,” Saifullah Khan, Chief Financial Officer of Baladna told The Peninsula on the sidelines of a press conference, recently.
Khan added: “Baladna facilities are state-of-the-art; products are of high quality and standards. It’s very sustainable. We want all Qataris should participate in the success story of the company that is why we decided to offer 75 percent of the Share Capital.
Asked if it was the right time for Baladna’s listing given the current market environment, especially in terms of liquidity, he said that its pertinent question which he was expecting during the press conference so that everybody would know why the founders of Baladna decided to go ahead with the decision.
“First of all it’s a new sector (agriculture) which will be providing diversified investment opportunity for the investors. It has tremendous growth potential. Baladna has already proved it. Secondly, Baladna is a very sustainable project which has proven its success, and now preparing to write new chapter in its journey, we want to new shareholders to be part of it.”
Ramez Al Khayyat, Vice-Chairman of Baladna, added: “There are many incentives to invest in Baladna. One of the important is that it is undervalued in terms of its real market value. The company received government support, and when the valuation was done (by PwC) and confirmed by different government authorities, the government support was not taken into consideration. So that will come directly to the potential investors.
Al Khayyat added: “We have contracts signed for government support for certain period of time. With regard to brand equity, we have not considered any value for that as well. Today we have a very good market share, which will continue to grow. The main reason for going public (IPO) is to share the success with the Qatari people. This was the plan from day one.”
He further said that the total value of investment in Baladna is about QR2.9bn, which is the enterprise value of the company today, but the company has been valued at QR1.9bn to safeguard the interests of the investors.
Commenting on the competitiveness and prices of its products, the Vice-Chairman reiterated that Baladna focused on efficiency from the day one since its inception. It deployed world-class technologies to the state-of-the-art facilities to maintain efficiency and competitiveness.
“Today we are producing more than 400 tonnes of fresh milk with the help of only 1,400 people, and I believe that other companies would need double of that number of workers to produce the same amount. Baladna has the best facilities all over the world. It’s a showcase. Everyone who come to Qatar they visit our facilities. Among our visitors we have members of the academia, researchers and universities from the US and Europe, and senior diplomats, ambassadors, ministers and even presidents and head of states from several countries visiting us.”
He further said that the company has investment heavily on human capital. It has a great team with best minds and skills available in the industry.
The CEO of Baladna Kamel Abdallah also noted that given the strategic investors such as General Retirement and Social Insurance Authority, Hassad Food, Al Meera, Mwani Qatar and Widam Food Company, who have committed to buying 23 percent of the share capital, shows the confidence the Qatari business community on Baladna.
On the prices of products, he said that Baladna products are of very high quality. For example its dairy products are produced from fresh milk sourced direct from its own dairy farms not from powder milk. We also export to overseas markets which proves that our products are price competitive not only in Qatar but in other markets as well.
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