MTN Nigeria Communications Plc has announced a plan to raise N50 billion through its latest Series 11 and 12 commercial paper (CP) issuance, part of the company’s larger N250 billion CP Issuance Programme. This initiative, disclosed to the Nigerian Exchange Limited and the public, is aimed at strengthening MTN Nigeria’s short-term working capital, providing immediate financial support for operational and infrastructure expansion.
The decision to issue commercial papers aligns with MTN’s strategy to leverage the debt market for flexible funding. This approach enables the company to handle short-term financial commitments without relying solely on long-term loans, optimizing its capital structure and reducing the burden of traditional banking loans. Funds raised from this issuance will support MTN’s operational expansion and help meet the increasing demand for digital and telecommunications services across the country.
MTN Nigeria’s financial reports as of September 2024 indicate a negative working capital of approximately N1.49 trillion. By leveraging its N250 billion CP programme, MTN can issue commercial papers in multiple series, providing a cost-effective solution to meet its working capital needs. With an external loan portfolio nearing N1 trillion, including N522.3 billion in short-term loans, this CP issuance will allow MTN to address its short-term liabilities while efficiently managing interest costs and liquidity requirements.
This move marks another step in MTN’s strategy to diversify its funding sources, helping the company navigate Nigeria’s fluctuating economic conditions. In December 2023, MTN raised N72.1 billion through commercial paper issuance, following a N52.9 billion issuance in the previous month. These actions underscore MTN’s consistent approach to securing liquidity to support operational costs and address short-term debt.
Additional terms and conditions of the Series 11 and 12 issuances are expected to be released soon. Amid high inflation and naira depreciation, MTN recently reported a profit after tax of N4.13 billion in Q3 2024, following several challenging quarters. The commercial paper issuance is part of MTN’s broader strategy to stabilize its financial position, enabling the company to remain resilient in an unpredictable economic climate.
