MTN to Sell N50bn Commercial Papers for Operations

By Modupe Gbadeyanka

Commercial papers valued at N50 billion is expected to be raised by a foremost GSM network provider, MTN Nigeria Communications Plc.

The telecommunications firm is raising the funds for its working capital as well as for general corporate purposes, a statement from the company explained.

The commercial papers would be issued in two tranches; series 1 and series 2 and institutional, high-net-worth individuals (HNWIs) are expected to embrace the exercise.

MTN Nigeria is yet to reveal full details of the commercial paper sale, but it promised to inform the investment community of new developments.

But the N50 billion exercise is under the organisation’s N100 billion commercial paper programme, which was approved by the FMDQ Securities Exchange.

The funding programme is part of MTN Nigeria’s strategy to diversify its financing options in order to remain a market leader in the country.

MTN Nigeria is unarguably the largest telecommunications company in the country and control the highest number of GSM subscribers in the largest Africa’s market.

“MTN Nigeria Communications Plc hereby notifies the Nigerian Stock Exchange (NSE) and the investing public of its proposed Series I and II commercial paper issuance of up to N50 billion.

“Having already received FMDQ Securities Exchange Plc approval for the registration of its N100 billion Commercial Paper Programme the issuance is part of the company’s strategy to diversify its financing options with the funds being deployed towards working capital and general corporate purposes.

“Further details on the initial issuance (as well as subsequent issuances) will be communicated to the market as the transaction(s) occur,” Uto Ukpanah, the Company Secretary, said.

Business Post reports that lately, corporate organisations have embraced the sale of commercial papers to raise short-term funds to carry out some critical operations.

The source of capital raising is cheaper when compared with other financial tools available at the debt market at the moment.