MTN Nigeria, the leading telecommunications company in the country, has announced its intention to issue up to N72.1 billion worth of commercial paper notes under its N250 billion commercial paper programme. The company said the move is part of its strategy to diversify its funding sources and meet its short-term working capital needs.
Commercial paper is a type of unsecured, short-term debt instrument issued by corporations to raise funds for their operations. It typically has a maturity of less than one year and offers a higher return than bank deposits. Commercial paper is usually backed by the issuer’s creditworthiness and reputation, rather than by collateral.
MTN Nigeria said the series 10 commercial paper notes will have a tenor of 180 days and will be issued at a discount rate to be determined by the market. The company said it has appointed Chapel Hill Denham Advisory Limited as the arranger and dealer for the issuance.
The company also said it has successfully completed series 8 and 9 of its commercial paper programme, raising a total of N52.9 billion from investors. The series 8 and 9 notes had a tenor of 182 days and 267 days respectively, and were issued at a yield of 14 percent and 16 percent respectively.
MTN Nigeria is the largest mobile network operator in Nigeria, with over 70 million subscribers and a market share of 40 per cent. The company offers voice, data, digital, fintech, enterprise and wholesale services to its customers. The company is listed on the Nigerian Exchange Limited and is a subsidiary of MTN Group, a multinational telecommunications company headquartered in South Africa.
The company’s latest financial results for the nine months ended September 30, 2023, showed that it recorded a revenue of N1.78 trillion, a 21.76 per cent increase from the same period in 2022. However, its profit before tax declined by 75.7 per cent to N32.08 billion, mainly due to the impact of foreign exchange losses, regulatory fines and increased operating expenses.
The company said it remains committed to delivering value to its stakeholders and contributing to the socio-economic development of Nigeria. The company said it has invested over N1.6 trillion in Nigeria since its inception in 2001 and has paid over N2.5 trillion in taxes and levies to the government. The company also said it has created over 500,000 direct and indirect jobs and supported over 90,000 micro, small and medium enterprises.
The company’s commercial paper issuance is expected to boost its liquidity position and enable it to pursue its growth and expansion plans in the highly competitive and dynamic Nigerian telecommunications market. The company said it will continue to leverage its innovative and customer-centric products and services to enhance its market leadership and profitability.
Source: Tribune Online
