MTN Nigeria Communications PLC (MTN Nigeria) has disclosed plans to raise N50 billion through its latest issuance of commercial paper (CP) to boost its working capital.
The plan is under N250 billion Commercial Paper Issuance Programme.
Not only that this Series 11 and 12 CP issuance is expected to strengthen MTN Nigeria’s short-term working capital, it will also diversify its financing base.
A notification to the Nigerian Exchange Limited and the investing public further revealed that this proposed issuance is part of MTN Nigeria’s ongoing strategy to tap the debt market as a flexible funding source to meet immediate financial needs.
It builds upon the company’s series of CP issuances in the past year as it pursues a robust approach to balance its capital structure.
The funds are expected to support the company’s operational and growth requirements as it seeks to expand its infrastructure, improve service delivery, and cater to the increasing demand for telecommunications and digital services across Nigeria.
MTN’s financial statement as of September 2024 suggests it has negative working capital of about N1.49 trillion
The cash flow is necessary in order to enable the company meet cash flow demands and service short-term debt without over-relying on long-term financing
This approach provides financial flexibility, allowing MTN Nigeria to manage interest costs and adjust its debt profile in line with operational cash flow, which is critical for a company with significant external loans.
The issuance also serves the broader purpose of diversifying MTN Nigeria’s financing sources, reducing reliance on bank loans, and maintaining a balance between short- and long-term debt.
This financial strategy not only enhances MTN’s liquidity but also positions it to better withstand the economic challenges in Nigeria’s volatile business environment.
While the company has yet to disclose specific terms of the Series 11 and 12 notes, further details are expected to be shared in the coming weeks.
