Dangote Cement plans to issue another N150 billion commercial paper to investors

By Eloyi Matthew

Dangote Cement Plc. is considering another issuance of commercial paper to investors following the success of its previous sale of the debt instrument.

Commercial paper is a money-market security issued (sold) by large corporations to obtain funds to meet short-term debt obligations (for example, payroll, accounts payable, inventories), and meeting other short-term liabilities.

In a notice to the Nigerian Exchange (NGX) Limited on Monday, August 23, 2021, Dangote Cement Plc. said that it wants to sell another N150 billion worth of commercial paper.

According to the company, the N150 billion commercial paper programme is mainly to fund its working capital and general corporate purposes.

It was gathered that since 2018, Dangote Cement, which is Sub-Saharan Africa’s largest cement producer with an installed capacity of 48.6Mta across 10 African countries, inclusive of 32.3Mta in Nigeria, has sold about N450 billion commercial paper to investors.

In the notice, signed by the Deputy Company Secretary, Mr Edward Imoedemhe, the cement manufacturer said the exercise allows it to expand its funding sources and competitive rates.

The commercial paper “allows us to broaden our funding sources and, combined with our N300 billion multi-instrument issuance bond programme, increases our access to capital market funding,” the company disclosed.

According to the Chief Executive Officer of Dangote Cement, Mr Michel Puchercos: “The establishment of a new N150 billion commercial paper confirms Dangote Cement Plc’s ambition to maintain its long and successful track record of accessing the Nigerian debt capital market.