Al Futtaim steps in with $666 million lifeline for Saudi retailer Cenomi
&imwidth=600&imheight=450&format=webp&quality=medium "Al Futtaim steps in with $666 million lifeline for Saudi retailer Cenomi")
Al Futtaim logo. Photograph: (X (Formerly known as Twitter))
Al Futtaim Retail will acquire 49.95% of Saudi Arabia's Cenomi Retail for 2.5 billion riyals, aiding its revival plan.
UAE-based Al Futtaim Retail has agreed to buy nearly half of Saudi Arabia’s Cenomi Retail for 2.5 billion riyals ($666 million), in a strategic move to tap into the kingdom’s consumer market and support the struggling retailer’s revival plan. As reported by Bloomberg, Al Futtaim will purchase 49.95 per cent of Cenomi Retail’s share capital from existing shareholders including Saudi FAS Holding Company and FAS Real Estate Company.
The shares will be acquired at 44 riyals apiece, a 33 per cent premium to Cenomi’s last closing price on the Saudi stock exchange. The deal also includes a shareholder loan agreement worth at least 1.3 billion riyals, further underlining Al Futtaim’s commitment to Cenomi’s financial stability.
Cenomi’s turnaround plan gets lifeline
Cenomi Retail had earlier disclosed it was in advanced talks with a strategic investor to help it “overcome existing challenges” and “maintain business continuity.” The firm has been working on a turnaround strategy that involves offloading non-core brands and reducing debt burdens.
The capital injection by Al Futtaim is expected to stabilise operations and provide the liquidity required to implement the restructuring plan.
Strategic push into Saudi market
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Al Futtaim’s investment marks a significant regional play, especially as Saudi Arabia ramps up consumer spending and modernises its retail sector under Vision 2030. The Dubai-based conglomerate is betting on Cenomi’s restructured portfolio and long-term growth prospects in the Kingdom.
As of now, neither Al Futtaim nor Cenomi has disclosed further details regarding the operational integration or board-level representation following the deal. However, the investment underscores growing UAE-Saudi commercial ties and regional consolidation in the retail sector.
Background: Cenomi’s changing fortunes
Cenomi Retail, previously known as Fawaz Alhokair Group, has been grappling with financial stress and operational inefficiencies in recent years. The firm has been actively seeking to streamline its brand portfolio and reduce reliance on underperforming segments.
According to Bloomberg, this latest stake sale and loan arrangement are expected to offer much-needed breathing room as the company charts a more focused and sustainable path forward.