Dangote Cement Plc has re-entered the debt capital market to raise N100 billion through commercial papers. The offering is part of the company’s broader N500 billion commercial paper programme registered with the regulatory authority.
Series Details and Yields
The N100 billion raise is split across Series 1 and Series 2 commercial papers. Series 1, with a maturity of 181 days, is priced at a discount rate of 16.1026%, translating to an implied annual yield of 17.50%. Series 2, maturing in 265 days, carries a 16.6968% discount rate, equating to a 19% implied yield per annum. The subscription window for both series closes on November 19.
Purpose of the Funds
Dangote Cement indicated that the net proceeds from the commercial paper issuance will be used for working capital needs. Analysts view this move as part of the company’s strategy to maintain liquidity while expanding its operations across the continent.
Sub-Saharan Africa’s leading cement producer, Dangote Cement operates a fully integrated “quarry-to-customer” business across 11 countries. With a combined production capacity of 55 Mtpa, including 35.3 Mtpa in Nigeria, the company has eliminated Nigeria’s dependence on imported cement and turned the nation into a cement exporter for neighbouring countries.
