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By Tom Arnold and Maha El Dahan
DUBAI, Jan 17 (Reuters) - The sale process for Saudi Arabia’s flour milling sector will be announced during the second quarter of 2018, HSBC Saudi Arabia, which is advising on the process, said on Wednesday.
The sale is one of the first privatisations the kingdom plans as part of a wide-reaching overhaul of its economy and has drawn interest from some of the world’s largest agribusiness firms, including Archer Daniels Midland Company and Bunge Limited.
The second quarter disclosure will include the timetable for qualifying potential investors and launching the sale process after obtaining regulatory approvals from the relevant authorities, HSBC Saudi Arabia said in a statement.
Some investors have previously complained about the slow progress of the privatisation, as well as the unwieldy sale process and onerous ownership rules that could deter foreign interest.
But on Wednesday one industry source said the statement showed the process was “moving forward” and that the “big names are still interested”.
The privatisation, which involves the potential sale of four flour milling companies by the Saudi Grains Organisation (SAGO), presents opportunities for expansion into value-added products within Saudi Arabia, the statement said.
SAGO is one of the world’s largest wheat and barley buyers. The kingdom has become a major importer of wheat since abandoning plans in 2008 to become self-sufficient as farming in the desert was draining scarce water supplies.
HSBC said it had reviewed the business and operating models of the milling companies to incorporate feedback received through the public consultation process and investors’ workshop in June 2017.
It also said it had prepared regulations on the privatisation based on the draft sector law issued by the Ministry of Environment, Water and Agriculture, while SAGO had reviewed the business and operating models of the milling companies to ensure they complied with the law.
The draft regulations will be published for public consultation once approved by the authorities, HSBC added. (Reporting By Tom Arnold and Maha El Dahan; Editing by Saeed Azhar)