Dangote Sugar Refinery announced the successful issuance of its N42.79 billion Series 4 and 5 commercial papers, issued at 23% and 25% respectively.
The papers were issued as part of the company’s N150 billion commercial paper issuance programme.
The Series 4 and 5 issuances comprised N12.93 billion for the 181-day Series 4 and N29.86 billion for the 265-day Series 5.
According to the notice issued by the company, the CP issuance witnessed participation from pension and non-pension asset managers, as well as institutional and individual investors.
As part of its N150 billion commercial paper programme, Dangote Sugar Refinery has issued N39.39 billion in 266-day Series 1 notes at a discount rate of 17.08%. Additionally, the company has issued N6.15 billion in 184-day Series 2 notes at a discount rate of 19.84%.
The company issued N53.47 billion in 254-day Series 3 notes at a discount rate of 21.30%. Hence, with its Series 1 to 5 CPs, Dangote Sugar has raised N141.8 billion.
According to the group’s notice, the company’s strategy of issuing commercial papers aims to diversify its funding sources. The funds raised will be used to support short-term working capital and meet funding requirements.
Dangote Sugar’s Q1 2024 financials reveal that the company incurred interest expenses of N543.2 million on commercial papers, compared to N21.48 million in interest expenses on bank loans.
This indicates that the company’s financing strategy is tilting more towards commercial papers than bank loans.
