With the successful implementation of the Series 13 and 14 CP issuance, recently, MTN Nigeria Communications has announced plans to issue Series 15 and 16 of its Commercial Papers (CP).

In a notice to the investing public through the Nigerian Exchange (NGX), the company said the issuance is targeted at raising N50 billion.

The development follows the successful implementation of the Series 13 and 14 CP issuance on November 29 where the company raised N72.18 billion, representing 144 per cent above the N50 billion target.

MTN Nigeria said the CP issuance is targeted at strengthening its short-term working capital. As MTN Nigeria aims to tap the debt market, the plan is also aimed at diversifying its financial base.

In light of the previous success in its Series 11 and 12, 13, and 14, MTN Nigeria is advancing its N250 billion Commercial Paper Issuance Programme by introducing the new Series 15 and 16 papers, while inviting Nigerian investors to participate.

“MTN Nigeria Communications PLC hereby notifies Nigerian Exchange Limited and the investing public of its proposed issuance of up to N50 billion Series 15 and 16 Commercial Paper notes under its N250 billion Commercial Paper Issuance Programme,” the company stated.

For the past year, MTN Nigeria has built upon its series of CP issuances. This provides a robust approach as the company seeks to balance its capital structure. In December 2023, MTN Nigeria raised N72.1 billion through CP issuance, followed by an N52.9 billion issuance in November 2023. These funds were used to work capital.

Both were deployed toward similar working capital needs, indicating MTN Nigeria’s strategy of leveraging the debt market to ensure liquidity for its operations and support its substantial loan obligations. It is also a strategic move to diversify the company’s financial options.

MTN Nigeria currently carries a total external loan portfolio of about N1 trillion, of which N522.3 billion are short-term loans. The CP Programme with a worth of N250 billion, allows the company to issue numerous CP series as required.

Significantly, it enables MTN Nigeria to service its short-term debts and meet cash flow demands without much reliance on long-term financing. For the purpose of financial flexibility, the company will be able to adjust its interest cost and debt logs.

Meanwhile, MTN Nigeria’s financial statement dated September 2024 showed it has a negative N1.49 trillion working capital.

For the first nine months of 2024, the company reported a big loss in its financial results, having experienced huge pressure owing to the country’s macroeconomic, regulatory, and currency fluctuations.

MTN Nigeria reported a 28% decline in its capital expenditure and accumulated an after-tax profit of N118.5 billion. Factoring in forex losses, it made an after-tax loss of N514 billion. On a year-on-year basis, the company suffered a 59.2% reduction in the after-tax profit.

The company highlighted that based on the restrictive rules placed on SIM registration, total subscribers decreased by 0.9 percent to 77 million. Also, the number of MoMo wallet subscribers reduced by 21.8 percent to 2.8 million.

On retained earnings and shareholders’ funds, MTN Nigeria figures stayed negative at -N723 billion and -N573.6 billion respectively. It recorded a 21.9 percent increase in its positive free cash flow to N536.8 billion. Also, the company reported a N519.1bn loss during the first half of 2024. This results from foreign exchange losses relating to the high inflation rate and the naira’s devaluation.

The recent CP launch is expected to boost the company’s operational and growth status. It will also be useful in its infrastructure expansion and improve service delivery, digital, and demands in telecommunications services.

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