By Dipo Olowookere
The management of Total Nigeria Plc has implemented one of the strategies it put in place to diversify its sources of funding.
The main reason is to get cheap funds to run the business efficiently and give shareholders of the company more value for their investment in the organisation.
One of these strategies is approaching the capital market, especially at a time yield in the fixed income market is very low, making it a good avenue for corporates to borrow at a low and single-digit interest rate.
This was what the energy firm pounced on when it sold commercial papers worth N15 billion to investors under its N30 billion CP programme.
The series 1 and 2 debut debt securities were registered with the FMDQ Securities Exchange Limited in December 2020 and listed on the platform a few days ago.
The financial advisers for the transactions were Stanbic IBTC Capital Limited and FBNQuest Merchant Bank Limited and the papers were oversubscribed, reflecting the confidence investors have in the company.
From Business Post gathered, there was significant demand for the instrument from a wide range of investors, resulting in a 3.9 times subscription level.
The Managing Director of Total Nigeria, Mr Imrane Barry, while giving his views on the exercise, explained that the programme was set up to enable the company to further broaden its sources of capital by accessing funding from the Nigerian debt capital markets while also reducing its overall funding costs.
He thanked investors for supporting the company’s debut issue and commended Stanbic IBTC Capital Limited and FBNQuest Merchant Bank Limited for ensuring the success of the issue despite the challenging environment.
