Dangote Cement, Africa’s largest cement producer, has announced the issuance of ₦50 billion ($138.8 million) Series 1 and 2 Notes under its ₦150 billion ($416.5 million) Commercial Paper Programme, announced on 27th June, 2018.
A Note is a legal financial instrument which one party, known as the issuer, promises in writing to pay a determinate sum of money to another.
In June, Dangote Cement stated that its Commercial Paper Issuance Programme will be listed on the FMDQ trading platform as the company plans to raise as much as N150 billion over a 3 year period. Dangote intends to spend heavily on expansion in 2018.
So far, $350 million has been earmarked for capital projects this year. This includes the building of export facilities at Nigeria’s seaports to boost shipments to neighbouring West African countries.
The more recent Series 1 and 2 Notes will be listed on Nigeria’s FMDQ OTC Securities Exchange on 19th July, 2018. Funds raised in the Commercial Paper (CP) Programme will be used for capital expenditure, working capital and general corporate purposes.
“This landmark transaction is the largest-ever Commercial Paper issuance by a corporate issuer in Nigeria,” said Group Chief Executive Officer, Joe Makoju following the announcement on July 4th, 2018.
“It allows us to broaden our sources of funding and combine established bank lines of credit with access to capital market funding, which will lower our overall cost of borrowing,” he added.
He was speaking on behalf of the firm, which has been described as a fully integrated quarry-to-customer producer. The company has operations in Cameroon, Congo, Ghana, Ethiopia, Senegal, Sierra Leone, South Africa, Tanzania and Zambia.
“The success of this programme reflects the high quality of our business and its strong cash generation, made possible by our market-leading positions in Nigeria and across Sub-Saharan Africa, where demand for cement is growing rapidly,” Makoju continued.
Prior to the announcement, Dangote Cement was advised by financial services firm, Stanbic IBTC Capital Limited as Sole Arranger and Dealer, Stanbic IBTC Bank PLC as Issuing Calculation and Paying Agent, Banwo & Ighodalo as Legal Counsel and Deloitte as Auditors to the Issuer.