By Dipo Olowookere
One of the leading pharmaceutical companies in Nigeria, Fidson Healthcare Plc, wants to borrow about N2 billion from capital market investors via the sale of commercial papers.
The firm intends to use the funds to finance its short-term working capital requirements and has promised to repay the ‘loan’ in 270 days’ time from its cash flows.
The corporate debt instrument is under its approved N10 billion CP programme. The current issue is the third series.
In November 2014, Fidson was in the capital market to sell a five-year secured fixed-rate corporate bond worth N2 billion and in July 2019, it raised N2.3 billion from a rights issue.
In 2020, it stayed away from the market due to the COVID-19 pandemic and the next year, precisely in March 2021, when economic activities were already picking up, it sold 270-day commercial papers valued at N4.5 billion to investors and in December of the same year, it sold another CP worth N2.15 billion.
The hunger of Fidson for commercial paper, a cheap source of borrowing, has not dried up as it is coming again to take N2 billion this time.
Business Post reports that the subscription for this offering opened on Friday, June 10, 2022, and will close on Friday, June 17, 2022, and the allotment done on the same date, with the funding done on Monday, June 20, 2022.
Details of the exercise indicated that the minimum subscription for the CP sales is N5 million and is issued at a discount rate of 11.0216 per cent and the expected yield is 12.0000 per cent.
The lead arranger for this transaction is FSDH Capital Limited, while the joint arranger is CardinalStone Partners Limited.
