Dangote Cement Plc, the largest cement producer in Sub-Saharan Africa with an installed capacity of 45.6 million metric tons annually across its operations in 10 African Countries, has gotten approvals from its board of directors to access the capital markets for medium-term debt funding.
This was disclosed in a notification which was sent by the company to the Nigerian Stock Exchange (NSE) and signed by the Deputy Company Secretary, Edward Imoedemhe.
Dangote Cement Plc, which is the largest company by market capitalization on the Nigerian Stock Exchange, is planning an inaugural issuance of bond under its N300 billion shelf programme.
The multinational firm intends to issue its maiden series of bonds (the ‘series 1 bonds’) immediately and subjects to obtaining regulatory approvals and favourable market conditions.
[READ MORE: Dangote Cement report N610 billion in revenue)
The management of Dangote Cement Plc disclosed that the proceeds of the series 1 bond would be used to refinance existing short-term debt that was previously used for cement expansion projects. The raised funds from this exercise will also be used as additional working capital as well as for general corporate purposes.
The book-building for the Series 1 bonds is expected to commence following its approval by the Security and Exchange Commission (SEC).
Series 1 bonds are non-marketable bonds which are designed to offer low-risk investments. Their non-marketable feature means that they cannot be bought or sold in the secondary markets. The two types of interest that a series 1 bond earns are an interest rate that is fixed for the life of the bond and an inflation rate.
Meanwhile, in June 2018, Dangote Cement had applied to raise a N150 billion fresh capital through the issuance of commercial paper. The funds from the commercial paper were to be deployed towards capital expenditure, working capital and general corporate purpose.
About Dangote Cement Plc: It is a publicly-traded cement manufacturer with headquarters in Lagos. The company is engaged in the manufacture, preparation, import, packaging and distribution of cement and related products in Nigeria with plants and import terminals in 9 other African countries.
It is a subsidiary of Dangote Industries Limited and the largest traded company traded on the NSE.