Dangote Cement seeks SEC approval to raise N300 bln bonds
By Samuel Bankole
Dangote Cement Plc is seeking capital market regulatory approval to register a N300 billion bond issuance programme to enable it to refinance short-term debt and expansion projects.
According to the financial advisor to the programme, the applications to the Securities and Exchange Commission (SEC) is a prelude to the company plans to raise fund in the market.
The cement company, majorly owned by Africa’s richest man, Aliko Dangote intends to explore its medium to long-term funding option after obtaining approval from the regulator to issue the bonds.
The largest cement company in the continent said its board has approved the move to access the Capital Market to support business growth and maximize available sources of its debt funding.
“When raised, the proposed funding will be used for capital expenditure of the Company’s expansion projects, short-term debt refinancing, and working capital requirements,” the cement company said in a regulatory filing.
It said the option of debt would be subject to favorable market conditions, the financial advisor stated.
The cement firm had last year resorted to the short-end of the money market to raise about N150 billion in commercial paper to reduce debt and finance working capital.
However, sources said the bonds programme is expected to be a longer tenor paper to allow for a breather for the company in restructuring its debt portfolio.
In October 2017, the company also registered a N300 billion bond programme with the SEC.
Not until May 2020, that the company approached the market to raise the initial N100 billion 5-year bond at 12.5 percent to finance its expansion programme across the continent, where it has its footprint.