By Aduragbemi Omiyale
Commercial paper worth N50 billion is being offered for sale to capital market investors by Dangote Sugar Plc, Business Post reports.
The sugar miller wants the money to support its short-term working capital and funding requirements, details of the exercise obtained by this newspaper revealed.
The main targets of Dangote Sugar for this capital raising option are institutional investors like the Pension Fund Administrators (PFAs) and high net-worth individuals (HNIs).
The CP sales commenced on Tuesday, April 2, 2024, and closes today, Friday, April 5, 2024, with the settlement date on Monday, April 8, 2024.
It was gathered that the subsidiary of Dangote Group is selling the paper in two series of 2 and 3 at 184-day and 254-day tenors, respectively.
The Series 2 maturity is being sold at a discount rate of 19.81 per cent, while the Series 3 goes for 21.30 per cent.
The minimum subscription for the commercial paper is N5 million and N1,000 thereafter, with the applicable taxes as required by the country’s laws.
Dangote Sugar, which is issuing the commercial paper under its N150 billion Commercial Paper Issuance Programme, is involved in the refining, distributing, and marketing of granulated sugar to wholesalers and top players in the skin care, food and beverage, and pharmaceutical industries.
The company has a combined installed refining capacity of 1.44 million metric tonnes per annum, boasting a market share of about 55 per cent in the retail space.
It is on track to becoming a leading global integrated sugar producer with its backward integration plan – target 0.7MMT refined sugar production, expansion of out-growers scheme and strategic seeking to expand existing warehouses and fleet of over 800 haulage trucks to cover target markets in Nigeria and West Africa.
Dangote Sugar has 47,364 hectares of sugar plantation and aims to produce 1.5 million metric tonnes of refined sugar annually from its sugarcane in the medium term.