UAC Nigeria Concludes Maiden ₦18.7 billion Commercial Paper issuance

The United Africa Company of Nigeria (UAC) has announced the completion of its ₦18.7 billion Series 1 and 2 Commercial Paper issuance (the “CP Issuance”). This is the debut issuance under its recently established ₦45 billion Commercial Paper Programme.

This comes on the heels of the company’s profit after tax declining by 4%. Investors King reported that revenue grew by 25.6% to N27.666 billion in the period under review, while gross profit expanded by 26.5% to N5.075 billion.

As expected operating expenses rose by 25.4% to 3.670 billion. Representing 13.3% of the company’s revenue for the period. Other income grew by a whopping 603.8% to N462 million.

Earnings before interest and tax increased to N1.867 billion, an increase of 62.2% from N1.151 billion filed in the first quarter of 2021.

However, net finance income plunged from N95 million in Q1 2021 to -N910 million in Q1 2022. The decline in net finance dragged profit before tax 4.8% down to N979 million.

In a press statement disclosed by the Nigerian Exchange Group,  UAC’s CP Issuance was very well received and attracted significant demand from a wide range of investors including pension fund administrators, asset managers, insurance companies and high net-worth individuals.

Investors King gathered that the CP Issuance comprised two tenors – a 90-day Series 1 issuance which was priced at 8.00% yield, and a 181-day Series 2 issuance which was priced at 8.25% yield. This reflects the strong credit quality of the Company and investors’ positive sentiment toward UAC’s operations and strategy.

The CP issuance, which was 3.8x subscribed, was part of the intra-group treasury arrangement between UAC and its subsidiaries aimed at meeting short-term working capital requirements. Stanbic IBTC Capital Limited acted as Lead Arranger and Dealer to the CP Issuance, while FCMB Capital Markets Limited acted as Joint Dealer to the CP Issuance. Banwo & Ighodalo acted as Solicitors to the Transaction. Commenting on the significance and success of the CP Issuance, Mrs. Funke Ijaiya-Oladipo, Group Finance Director of UAC, said: “We are delighted to have successfully completed our first CP Issuance in the Nigerian debt market. This is truly a testament to our Company’s strength, the sustainability of our Group’s brands and the trust displayed by the investing community.

It is without a doubt that the success of this issuance provides an avenue to optimize our funding cost while continuing to drive our strategic initiatives as an organization. We are pleased by the success of the CP Issuance and grateful to all parties involved in the transaction.”

The Commercial Papers will be quoted on the FMDQ Exchange