Eterna Plc, in a notice to the Nigerian Stock Exchange (NSE) and the investing public, has announced a proposed N10 billion 270-day Commercial Paper (CP).
The company intend to use the proceeds for working capital and general corporate purposes.
A Commercial Paper (CP) is basically an instrument that a company issues to the public when it wants to borrow money. Commercial Papers are short-term lending instruments and typically have a tenor of not more than 270 days.
Companies issue commercial papers when it needs money to fund its short term creditors or account payables (money owed to suppliers).
Commercial papers issued this year
Several listed firms in the country have raised funds through commercial papers this year. Dangote Cement raised N50 billion this year, the first tranche of a N150 billion shelf programme. Sterling Bank raised about N35 billion in August. Stanbic IBTC also issued $150 million worth of commercial papers in the same month.
The Central Bank of Nigeria (CBN) at a Monetary Policy Committee (MPC) meeting held this year, also hinted at the possibility of its purchase of commercial papers issued by private entities at single-digit rates.
Eterna Plc is currently trading on the floor of Nigerian Stock Exchange (NSE) at N6.20
2018 half-year financial results show the company recorded a revenue of N172.9 billion in 2018 compared to N79.5 billion in 2017. Profit before tax stood at N1.4 billion compared to N1.5 billion in 2017. Profit for the year stood at N965 million compared to N1 billion in 2017.
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