MTN Nigeria has officially notified the Nigerian Exchange and the public of its intent to issue Series 15 and 16 Commercial Papers, targeting N50 billion.
This follows the successful issuance of its Series 13 and 14 Commercial Papers on November 29, which raised N72.18 billion—144% above the N50 billion target.
In light of this success, MTN Nigeria is advancing its N250 billion Commercial Paper Issuance Programme by introducing the new Series 15 and 16 papers, inviting Nigerian investors to participate.
The company stated, “MTN Nigeria Communications PLC (‘MTN Nigeria’ or the ‘Company’) hereby notifies Nigerian Exchange Limited and the investing public of its proposed issuance of up to N50 billion Series 15 and 16 Commercial Paper notes under its N250 billion Commercial Paper Issuance Programme (the ‘Issuance’).”
This latest issuance is a strategic move designed to diversify the company’s financing options, with the proceeds earmarked to enhance its short-term working capital needs.
Backstory
Recently, MTN Nigeria successfully raised funds through two commercial papers as part of its N250 billion Commercial Paper Issuance Programme.
- On November 29, 2024, the company issued Series 13 and 14 Commercial Papers, offering yields of 27.50% for the 181-day paper and 29.00% for the 265-day paper to attract a variety of investors.
This issuance follows the earlier Series 11 and 12 Commercial Papers, issued on November 7, 2024, which raised N75.1 billion.
- The Series 13 and 14 issuances aimed for an initial target of N50 billion but saw a notable oversubscription of 144%, resulting in a total issuance of N72.18 billion.
- Stanbic IBTC acted as the lead arranger and dealer, with other institutions like CardinalStone, Chapel Hill Denham, Cordros, Coronation, FCMB, Meristem, Quantum Zenith, and Rand Merchant Bank participating as joint dealers.
The N250 billion Commercial Paper Issuance Programme is structured to raise capital in series to support MTN Nigeria’s operational and strategic goals.
Proceeds from this issuance are intended to enhance operational efficiency and support growth initiatives.
Performance
MTN Nigeria reported a post-tax loss of N514.9 billion for the first nine months of 2024, a decline largely driven by the depreciation of the naira, which intensified foreign currency-denominated obligations.
- As a result of this loss, MTN’s retained earnings and shareholders’ equity fell into the negative, totaling N723.0 billion and N573.6 billion, respectively, as of September 2024.
- In response to these results, CEO Toriola acknowledged the ongoing foreign exchange challenges but emphasized that MTN Nigeria continues to generate positive free cash flow, bolstered by favorable working capital movements and a reduction in capital expenditures.
He stated, “As we navigate the ongoing macroeconomic headwinds, we remain committed to initiatives that will accelerate our earnings recovery, strengthen our balance sheet, and expedite the restoration of our net asset position.”
To further support its balance sheet and enhance operational stability, MTN is moving ahead with the issuance of Series 15 and 16 commercial papers under its N250 billion commercial paper program.