MTN Nigeria eyes N50bn commercial paper to shore up liquidity

Joy Agwunobi

MTN Nigeria Communications PLC has announced a plan to secure N50 billion through Series 11 and 12 commercial paper issuances under its N250 billion Commercial Paper Programme.

The company noted that the move is aimed at shoring up short-term liquidity, expanding its funding sources, and meeting rising demands in Nigeria’s complex business environment.

According to details disclosed to the Nigerian Exchange Limited (NGX), the funds from this issuance will be allocated toward working capital, helping MTN reduce its dependency on long-term debt. In the  statement, the company noted that the initiative aligns with the company’s broader financing strategy, allowing for increased flexibility to address short-term financial needs.

This announcement follows the successful conclusion of MTN’s Series 10 issuance, part of the same N250 billion programme, which raised N72.1 billion. That offering attracted a 149 per cent subscription rate, reflecting strong investor interest in MTN’s operational stability and growth potential.

With an external debt approaching N1 trillion and over N522.3 billion in short-term obligations, MTN has leaned on the debt market to manage its immediate financing needs.

By leveraging commercial papers,the company  aims to strengthen its capital structure while advancing infrastructure expansion plans to keep pace with Nigeria’s increasing demand for telecom and digital services.

MTN’s third-quarter 2024 financial report indicated a negative working capital of approximately N1.49 trillion, underscoring its need for flexible funding solutions.

Previous commercial paper issuances followed a similar trend, with MTN raising N72.1 billion in December 2023 and N52.9 billion in November 2023 to address its working capital requirements.

This N250 billion programme provides MTN the ability to issue commercial papers as needed, giving it the flexibility to respond quickly to cash flow demands. Analysts highlight that this funding approach supports MTN’s broader goals of financing operational costs, expanding infrastructure, and meeting the growing demands of its customer base across Nigeria.