MTN Nigeria Communications PLC plans to raise N50 billion through Series 11 and 12 issuances of commercial paper under its N250 billion commercial paper Issuance Programme.
- This move aims to enhance short-term liquidity and diversify funding sources.
- The initiative was disclosed to the Nigerian Exchange Limited (NGX) and seeks to improve working capital while reducing reliance on long-term loans.
- MTN is navigating Nigeria’s increasingly volatile business landscape with an external loan portfolio nearing N1 trillion and over N522.3 billion in short-term obligations.
Analysts view this strategy of tapping into the debt market as essential for maintaining operational stability amid significant external financing demands.
- ; . Ayo Aluko, a Lagos-based financial analyst, noted that MTN’s regular commercial paper issuances reflect a balanced approach to capital management, allowing the company to meet immediate cash flow needs without inflating its long-term liabilities.
- MTN Nigeria Communications PLC has announced its intention to raise N50 billion through Series 11 and 12 issuances of commercial paper under its N250 billion commercial paper Issuance Programme, marking another strategic move to enhance short-term liquidity and diversify funding.
- – The initiative, disclosed to the Nigerian Exchange Limited (NGX), seeks to shore up working capital while reducing reliance on long-term loans, especially as MTN navigates Nigeria’s increasingly volatile business landscape
- – With an external loan portfolio approaching N1 trillion and over N522.3 billion in short-term obligations, MTN Nigeria has adopted a pattern of tapping into the debt market, a strategy that analysts view as essential for maintaining operational stability amid significant external financing demands.
- “MTN’s regular commercial paper issuances demonstrate a balanced approach to capital management, where the company can meet immediate cash flow needs without inflating its long-term liabilities,” remarked Ayo Aluko, a Lagos-based financial analyst.
- By issuing commercial paper, MTN can stagger its repayments and avoid locking capital in long-term debt, which is crucial for sustaining cash flow in a high-interest environment, according to Ifeoma Eze, a telecom sector analyst.
- The N250 billion commercial paper programme enables MTN to issue commercial paper in multiple series as needed, offering financial flexibility to adapt to short-term cash flow demands.
- Analysts note that the issuance aligns with MTN’s broader goals of financing its operational costs, supporting infrastructure expansion, and meeting increased demand from a growing customer base.
- MTN is expected to release detailed terms for the Series 11 and 12 notes soon, providing investors further insights into the company’s debt management approach amid Nigeria’s economic headwinds.
In the current economic climate, MTN’s financial strategy is designed to enhance liquidity while shielding its debt obligations from adverse market conditions, particularly as interest rates remain high.This approach allows MTN to sustain its market position and continue its capital expenditure programs without the financial strain of traditional loan structures, as noted by Aluko.
