Dangote sugar launches N50bn commercial paper to boost operations

Dangote Sugar raises N50bn through Series 6 & 7 commercial papers to support working capital and drive operational expansion efforts.

 

 

[dropcap]D[/dropcap]angote Sugar Refinery Plc has announced a N50 billion commercial paper issuance to tap into the debt capital market.

The offering includes Series 6 and Series 7 commercial papers under its N150 billion debt programme, with proceeds earmarked to support the company’s working capital and strategic funding requirements.

 

Also read: Dangote cement to issue N300bn bonds for debt refinancing and working capital

 

The Series 6 paper, with a 180-day tenor, offers investors a 24.9889 per cent discount rate, translating to an implied yield of 28.5 per cent.

Meanwhile, the Series 7 paper, with a 270-day tenor, is priced at a 24.5524 per cent discount rate, providing an implied yield of 30 per cent.

Both offerings will remain open to investors until 12 December 2024, according to market sources.

As Sub-Saharan Africa’s largest sugar refinery, Dangote Sugar continues to solidify its market leadership. With an installed refining capacity of 1.49 million metric tonnes per annum (MMT), the company has an ambitious plan to increase production by an additional 1.5 MMT through its backward integration strategy.

This initiative aims to boost output from locally grown sugarcane, further enhancing its position as a leading global integrated sugar producer.

Market analysts have lauded the move, emphasising its potential to strengthen Dangote Sugar’s operational capacity and expansion initiatives.

Investment banking firms facilitating the offering also noted that the attractive yields reflect the company’s robust financial profile and growth prospects.

This capital raise follows a series of strategic efforts by Dangote Sugar to align with Nigeria’s National Sugar Master Plan, aimed at boosting local production and reducing dependence on sugar imports.

The commercial paper issuance is expected to further enhance the company’s ability to meet domestic demand and drive export opportunities.

By securing these funds, Dangote Sugar continues to demonstrate its commitment to operational excellence and long-term value creation for its stakeholders.