MTN Nigeria Communications Plc has declared its ambition to raise a sum of N50 billion through its Series I and II Commercial Paper issuance to bridge working capital gap.
Typically short-term debt instruments, commercial papers enable corporates to source funds from the investing public to meet obligations ranging from financing of payroll and accounts payable to settling inventories.
“Having received FMDQ Securities Exchange Plc approval for the registration of its N100,000,000,000 (One Hundred Billion Naira), Commercial Paper Programme (“the Programme”), the issuance is part of Company’s strategy to diversify its financing options with the fund being deployed towards working capital and general corporate purposes,” MTN Nigeria said in a note to the Nigerian Stock Exchange (NSE) on Friday, endorsed by Company Secretary Uto Ukpanah.
Nigeria’s second biggest company by market value towards the end of April reported a growth in first-quarter profit by 16.7% to N51.146 billion, spurred by growth in the number of voice network subscribers to 4.2 million and addition of 1.7 million data subscribers to its customer base.
The debt-raising is arranged by Chapel Hill Denham Advisory while intending noteholders are expected to make a minimum subscription of N5 million each with exemption from withholding tax payment.
A subsidiary of Johannesburg-headquartered MTN Group Limited, itself Africa’s biggest wireless operator, MTN Nigeria contributed one third of its parent company’s revenue and roughly 40% of its profit before interest, taxes, depreciation and amortisation in 2019.
MTN Nigeria closed trade at the last session of the NSE at N115 per share.