Saudi-based Savola Group is set to close a SR1.5 billion ($400 million) Islamic bond issue on Monday, two sources said, the company's debut sukuk and the first local currency debt offering in Saudi Arabia of 2013.

The food conglomerate, which has the Middle East's biggest sugar refining business, is issuing a seven-year sukuk priced at 110 basis points over the Saudi interbank offered rate (Saibor), the sources said, speaking on condition of anonymity as the information isn't public yet.

The company sought shareholder approval for the sukuk issue back in October and set up a programme to issue the Islamic bond in December, saying the programme arranger was HSBC Saudi Arabia.

Savola is due to report its fourth-quarter numbers this month. According to the average of three analysts polled by Reuters, the group is expected to post an 8.4 per cent decline in Q4 net profit.

In October, Savola said it had bought shares in fellow food firm Almarai Co worth SR2 billion, raising its stake in the company to 36.5 per cent.

Savola's shares ended Monday up 0.25 per cent against a decline of 0.4 per cent in the wider market.-Reuters