MTN Nigeria Communications PLC (MTN Nigeria) has announced its intention to raise $64.3 million through its latest round of commercial paper (CP) issuance under its larger $321.6 million Commercial Paper Issuance Programme.
This Series 11 and 12 issuance aims to bolster MTN Nigeria’s short-term working capital and expand its financing base, according to a recent disclosure to the Nigerian Exchange Limited.
This planned issuance is part of MTN Nigeria’s ongoing strategy to utilise the debt market for flexible funding that meets its immediate financial needs. Building on previous CP issuances over the last year, this latest round reflects MTN Nigeria’s approach to maintaining a balanced capital structure.
Funds raised from this issuance will support MTN’s operational and growth goals, particularly in expanding infrastructure and improving service delivery to meet growing demand for telecommunications and digital services across Nigeria.
The company’s financial statement from September 2024 revealed a working capital deficit of approximately $1.9 billion, highlighting the need for capital infusion.
MTN Nigeria’s $321.6 million CP program enables it to issue CP series as needed, providing essential liquidity to meet cash flow demands and service short-term debt without excessive reliance on long-term financing.
This strategy offers MTN Nigeria greater flexibility to manage interest costs and adjust its debt load in line with operational cash flows—a crucial benefit given its sizable external loan obligations.
Additionally, the program aims to diversify MTN Nigeria’s financing sources, reducing its dependence on bank loans while maintaining a balanced debt structure between short- and long-term obligations.
This approach strengthens MTN’s liquidity, positioning it to better navigate Nigeria’s volatile economic landscape.
Details on the specific terms of the Series 11 and 12 CPs have yet to be disclosed, with more information expected in the coming weeks. MTN Nigeria’s current loan portfolio totals roughly $1.3 billion, with $687 million attributed to short-term loans.
The frequency of MTN Nigeria’s CP issuances signals a strategic effort to manage these short-term liabilities effectively. By raising additional capital through the Series 11 and 12 notes, MTN Nigeria seeks to address immediate working capital needs and alleviate some of its short-term loan obligations.
In December 2023, MTN Nigeria successfully raised $92.7 million through CP issuance, followed by another $68 million in November 2023. Both rounds were allocated to similar working capital needs, underscoring MTN Nigeria’s reliance on the debt market to ensure liquidity for its operations and to support its substantial loan commitments.
