The paper will be listed on the FMDQ trading platform a few
days after its allotment date.
Dufil, a leader in the Nigerian fast-moving consumer goods
segment made this disclosure in an Investor Presentation sighted by
Nairametrics today, the 19th of February 2021.
In line with the information contained in the document, the
company plans to raise as much as N30 billion through its Series 3 notes, and
an additional N30 billion from its Series4 notes under its Commercial Paper
Issuance Programme.
However, offer for the N30 billion Series 3 & 4
Commercial Paper which will be officially issued on the 2nd of March 2021, and
subsequently listed on the FMDQ trading platform, have been flagged open for
interested participants since the 19th of February. The offer is expected to
close by the 26th of this month.
The N30 billion Series 3 Commercial Paper comes with a
182-day tenor has an implied yield of 4%, and it is expected to mature on 31st
August 2021.
The Register for the Series 3 paper will be closed from 24
August 2021 until the Maturity Date.
The N30 billion Series 4 Commercial Paper issued by Dufil
under its Commercial Paper Issuance Programme with a 262-day tenor and a
maturity date pegged at 25th of November 2021, comes with a 5% implied yield
range.
The Register for the Series 4 paper will be closed from 18
November 2021 until the Maturity Date.
According to information provided by Dufil, the company
which is currently operating at a growth phase, requires debt funding to carry
out its daily operations.
Hence, the Company relies heavily on debt to meet its
growing working capital requirements, as it plans to use the papers to manage
its short-term trading and liquidity requirements, given the current favourable
interest rates. This will also minimize currency risk, about $12.5 million as
estimated by the company, however, this cannot be eliminated due to the large
proportion of raw material inputs that are imported.
It is important to note that the company has been able to
curtail the escalation of debt in its debt portfolio in a bid to free up free cash
flows for other operations, as the group will be taking advantage of the
low-interest environment to pay back its existing high-interest short term
loan.
Dufil, however, plans to refinance some of its outstanding
debts through its commercial paper programme.