Ben Dawood Holding has obtained a one-year sharia-compliant revolving credit facility worth SAR 217.8 million to finance its acquisition of a 51 percent stake in Faza Food. The deal involves no bank guarantees and signals a strategic move in Saudi retail.
Ben Dawood Holding has locked in SAR 217.8 million in sharia-compliant financing to buy a controlling stake in Faza Food. The money comes from Arab National Bank and Emirates NBD. It is a revolving credit line for one year. No bank guarantees are required. That is unusual for a deal of this size. As of now, there is no independent confirmation from Reuters, Bloomberg, Tadawul, or the Saudi Central Bank (SAMA). The deal remains unverified by major financial newswires and official regulatory disclosures.
Ben Dawood is pushing to grow its reach in Saudi Arabia's food distribution market. Islamic finance is at the center of this move. The company says the facility is only for buying 51 percent of Faza Food's shares. There are no related-party links in the transaction. Faza Food appears on the Saudi Food and Drug Authority's licensed establishments list. This confirms its place in the regulated food supply chain. But the list does not confirm the acquisition or its terms.
Islamic finance structure and deal specifics
The financing uses a murabaha structure. This is a standard tool in Islamic banking. It avoids interest by using a cost-plus-profit model. That fits Saudi Arabia's rules and the rising demand for sharia-compliant business deals. The revolving credit lets Ben Dawood draw and repay funds as needed over the year. This gives the company flexibility during the acquisition. SAMA has long promoted Islamic finance. Murabaha is a favorite for both corporate and retail lending in the Kingdom.
Ben Dawood's statement on Tadawul says the lack of bank guarantees lowers the collateral burden. This could cut the overall cost of capital. More Saudi companies are using Islamic finance for acquisitions and sector consolidation. The Saudi riyal (SAR) stays pegged to the US dollar. SAMA keeps its policy rate close to the US Federal Reserve's. This helps keep the currency stable and supports cross-border financing. More details on Saudi monetary policy are available on the Saudi Central Bank monetary policy page.
Market context and financial details
The SAR 217.8 million facility shows Ben Dawood is making a big bet on Faza Food. The company aims for a 51 percent stake. That means control over Faza Food's operations and future. The one-year revolving credit matches the expected timeline for closing the deal and bringing Faza Food into the group. Saudi retail is a tough market. Carrefour Saudi Arabia and other big names compete for share. There is still no public filing or regulatory statement confirming this deal is done or approved.
Emirates NBD has backed other large loans in the region. Its recent activity in Egypt shows its appetite for high-value lending. The Saudi deal highlights the bank's ongoing role in sharia-compliant corporate finance. The International Monetary Fund (IMF) notes that Islamic finance is growing fast in the Gulf Cooperation Council (GCC). Saudi Arabia is one of the biggest markets for sharia-compliant assets.
Strategic implications for Saudi retail
Ben Dawood's choice of a sharia-compliant revolving facility shows financial discipline. It also matches local market expectations. No related-party involvement. No bank guarantees. The structure is simple. That cuts down on conflicts of interest and paperwork. Other Saudi companies may look to this model for their own acquisitions. The Bank for International Settlements (BIS) has pointed out that Islamic finance structures have held up well during market swings, especially in emerging markets like Saudi Arabia.
For Ben Dawood, buying a majority stake in Faza Food is a clear move to strengthen its supply chain and broaden its product range. The company's ability to get this level of financing on good terms shows its market standing. It also shows that major regional banks trust its strategy. Still, there are no direct comments from the parties or regulators. The financial impact on Ben Dawood's balance sheet is not confirmed in public disclosures.
Murabaha, the financing method here, is a mainstay of Islamic banking. Instead of a standard loan, the bank buys an asset and sells it to the client at a markup. Repayment happens over time. No interest is charged. That is key under Islamic law. Profit margins are set up front. In Saudi Arabia, murabaha is common for both consumer and corporate deals. It gives a compliant alternative to regular loans and supports the country's economic diversification plans. The Saudi Central Bank and IMF are watching the growth of Islamic finance as part of Vision 2030.
