Chinwendu Obienyi
Nigeria’s largest company by market capitalisation, Dangote Cement Plc, has informed the Nigerian Stock Exchange (NSE) that it intends to issue its maiden series of bonds after it obtained approvals from its Board of Directors.
According to a filing sent to the NSE yesterday, the cement company with an installed capacity of 45.6Mta across operations in 10 African countries, noted that it wants to access the capital markets for medium term debt funding, subject to obtaining regulatory approvals.
The statement said, “Dangote Cement Plc intends to issue its maiden series of bonds (the Series 1 Bonds) imminently, subject to obtaining regulatory approvals and favourable market conditions. The process of obtaining requisite approvals from the Securities and Exchange Commission (SEC) for the issuance of the Series Bonds has begun”. The company further disclosed that the proceeds of the Bonds will be used to refinance existing short-term debt previously applied towards cement expansion projects, working capital and general corporate purposes.
“Book building for the Series 1 bonds will commence following approval of the transaction by the SEC”, it added. The company had recieved approval from the SEC and other regulators to raise N300 billion ($833 million) in local-currency bonds as at March 2018.
It said that the debt instrument would be issued in tranches of N50 billion at a time whenever interest rates are favourable over next three years while adding that the company was considering sale of Eurobonds to improve funding. The funds raised will be used for capital projects including the construction of export facilities at Nigeria’s ports. This will enable the firm export much needed raw materials to its other subsidiaries.