Business
Dangote, Nigeria’s Largest Employer Proudly Becomes Biggest Private Sector Debtor
By Emmanuel Aziken with Agency Reports
Dangote Conglomerate which shadows the Federal Government as the highest private sector employer has through one of its subsidiaries, Dangote Cement Company become the highest private sector debtor.
This emerged after the cement company completed its N116 billion Series 2 bond issuance which is the largest corporate bond issuance in the Nigerian capital market, the firm deposed in a statement made available to the Nigerian Exchange Ltd. (NGX) Website on Wednesday in Lagos.
GreenWhiteGreen GWG reports that Dangote Cement is part of the Dangote Group, a conglomerate that is famously reputed as the biggest private sector employer in Nigeria.
The bond issuance is part of the company’s effort in restructuring its finances through minimizing its exposure to short term obligations to the banks. It also reduces its exposure to often expensive commercial papers and also significantly, brings a measure of stability to the company’s financial outlays away from the often ad-hoc procedures in the money market.
According to the company, the bond issuance is the second issuance under its N300 billion multi-instrument issuance programme which is the biggest debt issuance by a private sector entity in Nigeria.
GreenWhiteGreen GWG reports that the successful bond issuance underpins the confidence of the markets in the Dangote brand given that it attracted participation from a wide array of institutional investors, including pension funds, asset managers, banks, insurance companies and high net-worth individuals.
The bond issuance comprised three tranches: a five-year Tranche A issuance priced at 11.85 per cent , a seven-year Tranche B issuance priced at 12.35 per cent, and a 10-year Tranche C issuance priced at 13.00 per cent.
According to the company, the proceeds of the bond issuance will be used to finance the company’s Nigeria expansion projects, short-term debt refinancing and working capital requirements.
It also said StanbicIBTC Capital acted as lead issuing house/bookrunner to the bond issuance, while Absa Capital Markets, Meristem Capital, Standard Chartered, United Capital and Coronation Merchant Bank, Ecobank Development Company, FBNQuest Merchant Bank, FCMB Capital Markets, Futureview Financial Services, Vetiva Capital, Quantum Zenith Capital and Rand Merchant Bank Nigeria acted as joint Issuing Houses.
Commenting on the bond issuance, Mr Michel Puchercos, Group Managing Director of Dangote Cement, said: “Dangote Cement is delighted to have successfully undertaken a second issuance under our multi-instrument issuance programme which was launched last year.
“We are even more delighted to have concluded the most significant corporate bond issuance in the history of the Nigerian debt capital markets.
”This landmark transaction will fund our expansion projects and further support the implementation of our export strategy.
“I want to thank our stakeholders and investor community for their strong participation in another Bond issuance with the company.”
Puchercos said the bond notes would be listed on the NGX and FMDQ Securities Exchange.(NAN)
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