One of Nigeria’s leading food and agro-allied groups, Flour Mills of Nigeria Plc, has announced the issuance of the sum of N1.7 billion (series 6).
The new issuance will be deployed under Flour Mills’ N100 billion Commercial Paper Programme which is registered with the FMDQ OTC Plc (FMDQ) and completed on Thursday, February 14, 2019.
Nairametrics understands that all issuances of Flour Mills Nigeria Plc total N20.34 billion and are quoted on the FMDQ Exchange.
The management of FMN disclosed that the commercial paper programme will help the
Company to focus on its strategic objective of sustaining its market leadership position
within the foods and agro-allied space.
Understanding what commercial paper entails
Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts payable and inventories and meeting short-term liabilities. Maturities on commercial paper rarely range longer than 270 days. Commercial paper is usually issued at a discount from face value and reflects prevailing market interest rates.
Commercial paper is not usually backed by any form of collateral, making it a form of unsecured debt. As a result, only firms with high-quality debt ratings will easily find buyers without having to offer a substantial discount (higher cost) for the debt issue. Because commercial paper is issued by large institutions, the denominations of the commercial paper offerings are substantial, usually $100,000 or more. Other corporations, financial institutions, wealthy individuals, and money market funds are usually buyers of commercial paper.
What you should know about Flour Mills
Flour Mills of Nigeria Plc was incorporated on September 29, 1960, as a private limited liability company with a modest paid-up share capital of N1 million and converted to a public company in November 1978.
The beneficial interest in the company’s equity is held by Nigerian and Overseas shareholders. Presently, two foreign shareholders own about 56% of the company’s paid-up share capital. The balance is held by over 75,000 individuals and institutional investors.
Flour Mills of Nigeria Plc’s stock is currently trading at N17.55 on the floor of the Nigerian Stock Exchange (NSE).