By Dipo Olowookere
Bonds worth N20 billion issued by Flour Mills of Nigeria Plc in February 2020 were on Thursday, April 9, 2020, listed on the Nigerian Stock Exchange (NSE).
The papers, sold in two tranches by the company from February 3 to February 14, 2020, were admitted to the exchange today.
The Series 3 fixed rated senior unsecured bonds were offered to investors under the company’s N70 billion bond issuance scheme.
Business Post gathered that N12.5 billion of the tranche A were sold at 10 percent with 3-year tenor, while N7.5 billion worth of the tranche B were issued at 11.10 percent with 5-year maturity.
It was learned that the papers were 100 percent subscribed and the interest payments would be made semi-annually in August and February.
Flour Mills hopes to use proceeds from the bonds to refinance its existing short-term debt. In addition, it intends using the funds to increase the wealth of the company’s shareholders by boosting the efficiency of its balance sheet.
Recall that in 2018, Flour Mills sold N20 billion bonds in the Series 1 and Series 2 at N10 billion each. The exercise was oversubscribed by 190 percent. The bonds were then listed on the NSE and the FMDQ Securities Exchange.
While the series 1 bonds were priced at 15.50 percent for a tenor of three years, the series 2 bonds was priced at 16.00 percent for a tenor of five years with a one-year moratorium on principal payment and an amortizing profile.
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