• Fri. Sep 29th, 2023

How Dangote Cement plans to utilise proceeds from its N50bn bond issue

ByBassey Udo

Jun 17, 2021

The proceeds from its recent issue of N50 billion bond would be used to finance its expansion projects, short-term debt refinancing and working capital requirements, Dangote Cement Plc has said.
On May 26, 2021, the cement manufacturing firm reputed to be Africa’s largest producer, issued N50 billion Series 1 Fixed Rate Senior Unsecured Bonds under its new N300 billion Multi-Instrument Issuance Programme.
The issue was at coupon rates of 11.25 percent, 12.50 percent and 13.50 percent for the 3, 5 and 7-year tranches respectively.
In a public disclosure to the Nigerian Stock Exchange on June 16, 2021, the management of the company said in a statement signed by its Deputy Company Secretary, Edward Imoedemhe, that procceeds from the bond issue would utilised in financing a number projects towards its continued expansion and growth. Imoedemhe said the bond issue was well received, with participants covering a wide range of investors, including domestic pension funds, asset managers, insurance companies and high net-worth investors, despite the market headwinds.
“The proceeds of the bond issuance will be deployed for the company’s expansion projects, short-term debt refinancing and working capital requirements,” Imoedemhe said.
Beyond the bond, which he said was the first to be issue of a traditional bond under the new Multi-Instruments Programme, Imoedemhe said Dangote Cement also registered a programme that would enable it consider different types of fixed income instruments to cater for different types of investors.
“The ability to issue Green Bonds and Sukuk will enable the company to leverage the depth and breadth of the Nigerian market,” he said.
Comenting on the bond issue, the Chief Executive Officer of Dangote Cement Plc, Michel Puchercos, said, “This bond issuance allows us move a step further in achieving our expansion objectives and will be deployed to projects instrumental in supporting our export strategy, while improving our cost competitiveness. “We thank the investor community for their continued support in the management of Dangote Cement and their successful participation in the bond issuance.”
He listed the parties to the transaction to include Absa Capital Markets Nigeria, as Lead Issuing House for the Series 1 Bonds, and Stanbic IBTC Capital, Standard Chartered Capital & Advisory Nigeria Limited, United Capital Plc, FBN Quest Merchant Bank, FCMB Capital Markets and Coronation Merchant Bank, as Joint Issuing Houses.
Other financial institutions involved as Joint Issuing Houses included Ecobank Development Corporation Nigeria, Futureview Financial Services, Meristem Capital Limited, Rand Merchant Bank, Quantum Zenith Capital and Vetiva Capital Management.
Imoedemhe said the Bonds would be listed on the floor of the Nigerian Exchange Limited and FMDQ Securities Exchange.

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