There are strong indications that MTN Nigeria is planning to raise N100 billion through Commercial Paper (CP). Although the telco giant is yet to officially announce the plan, an official said the firm would issue the commercial paper through the Nigerian Stock Exchange .
Reacting to reports of the proposed plan on Tuesday, Utoh Ukpanah, the company secretary, said that MTN is exploring every financing option, including the issuance of commercial paper to boost its operations.
Earlier, the Head of Frontier Research at EFG Hermes, Kato Mukuru, had told CNBC in an interview that the company will issue commercial paper through the NSE.
Mr Mukuru said he got reliable information from a staff member of the Nigerian Stock Exchange that MTN was about to issue the N100 billion commercial paper.
On the reason for the plan, Mr Mukuru noted that the company may have opted for the commercial paper because “either it is cheaper than getting bank finances or the banks don’t want to finance it.”
The EFG staff added, however, that that type of borrowing should ordinarily be secured from the bank.
Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts payable and inventories and meeting short-term liabilities.