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By Dipo Olowookere

One of the oil companies operating in Nigeria, Eterna Plc, has borrowed N3 billion from the commercial paper market, Business Post has confirmed.

The N3 billion raised in commercial papers is the first series of the N10 billion CP debt issuance programme launched by the oil firm.

It was gathered that the exercise was successful as investors keyed into the vision of the company, which is raising the fresh capital to boost its operations.

In October 2018, the Eterna Plc informed the Nigerian Stock Exchange (NSE) that it was selling the commercial papers to willing investors to be used for working capital and general corporate purposes.

Information reaching Business Post has it that the company, after the successful exercise, has listed the commercial papers on the trading platform of FMDQ.

This followed the approval from FMDQ Board Listings, Markets and Technology Committee.

In recent times, many companies have been considering raising funds from the commercial paper markets.

Commercial papers are unsecured promissory notes with a fixed maturity of about nine months issued by firms to raise money to meet short term finance obligations.

The notes are backed by the promise of the issuers to repay based on certain agreed terms and they present a cost-effective and stable means of sourcing scarce capital as against to bank loans, providing investors avenue to diversify their portfolios.

Given by their short-term nature, commercial papers permit high relative return on investment, allowing investors to remain relatively liquid.

Business Post reports that shares of Eterna Plc depreciated by 2.30 percent at the Nigerian stock market on Thursday to close at N4.25k per unit.

Eterna Plc is an integrated energy company which manufactures, markets and distributes lubricants, supplies chemicals, trades in crude oil among other services.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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