Dufil Prima, makers of Indomie has raised a total of N10 billion in the first series of its N40 billion issuance programme. The Company has previously launched several short-term commercial paper issuances under its N30 billion CP Programme which have been fully been repaid.
Where the money will go to?
Proceeds of the bond will be used to refinance existing debt obligations, and finance capital projects for the company. Dangote Flourmills announced that it has exited its noodles business and has sold the assets of Dangote Noodles to Dufil Prima Foods. Dangote Flourmills had said that a business portfolio review revealed that the noodle business was not strategic to its vision.
Why the raise is significant?
Dufil issued the bond at a fixed coupon rate of 18.25% which is slightly higher than the rates at which Lagos state and the Federal Government raised its bonds. The Federal Government closed a 4 year bond at 15.98% this week. Lagos state recently raised a 7 year bond at 16.75%.
The raise will encourage other companies to carry out similar exercises. Private investors have severally complained of been crowded out by the Federal Government in the debt market. A drop in crude oil revenue has led to the government ramping up borrowing from the debt market.
Dufil Prima originally known as De United foods commenced operations in 1996 in Ota, Ogun State. The company originally started with production of Indomie noodles, but has since diversified into the production of pasta, cooking oil, and chin chin. Dufil Prima Ltd was incorporated as a private company in 2001 but following a restructuring, it was registered as a public limited liability company and became the holding company of the group in 2008.
