By Aduragbemi Omiyale
A notable flour milling firm, Flour Mills of Nigeria Plc, has approached capital market investors for the sale of N48 billion worth of commercial papers to support its short-term funding requirements.
The exercise started on Thursday, April 4, 2024, and was expected to conclude today, Tuesday, April 9, 2024, but due to the public holidays today, Wednesday and Thursday, the closing date may be extended till Friday, April 12, 2024, when the market should reopen for business.
The capital market in Nigeria is closed for business at the moment due to the holiday declared by the federal government to mark the end of Ramadan, Eid el-Fitr.
Business Post reports that Flour Mills is selling the corporate debt instrument under its N200 billion Commercial Paper Programme now in its Series 7 and 8.
The minimum subscription for the paper is N5 million and multiples of N1,000 afterwards, with Series 7 at a 180-day tenor and Series 8 at a 254-day tenor.
The six-month maturity is offered to investors at a discount rate of 21.07 per cent, while the eight-and-a-half-month maturity is sold at a discount rate of 21.67 per cent.
This newspaper gathered that Flour Mills intends to repay this facility from its general cash flows, with purchases to be settled via direct debit, and electronic funds transfer after notifying all applicants of their allotment through an email and/or telephone not later than Wednesday, April 10, 2024.
The lead arranger for this transaction is FBNQuest Merchant Bank Limited, and the joint dealers are CardinalStone Partners Limited, Comercio Partners Limited, Chapel Hill Denham Advisory Limited, Cordros Capital Limited, FCMB Capital Markets Limited, Kairos Capital Limited, and Quantum Zenith Capital & Investments Limited.
Flour Mills, which is rated “A-” by Agusto & Co and “A” by DataPro, is the largest and oldest integrated food business in Nigeria, with a broad product portfolio and a robust pan-Nigerian distribution network.
The firm has the largest food basket offering of any Nigerian FMCG company with over 28 consumer products, and its core strength lies in its food business, which is the highest contributor to the company’s revenue (contributing 64.3 per cent as of March 31, 2022).
The food business encompasses flour milling as well as the production of pasta, noodles, semolina, and wheat meal, and its flagship flour brands, Golden Penny Flour and Golden Penny Pasta have sustained market leadership status in the flour and pasta markets.
