MTN Nigeria is set to issue two series of commercial papers worth N52.895 billion. The telecom giant filed a corporate notice with the Nigerian Exchange Limited, announcing Series 8 and 9 commercial paper notes under its N250 billion Commercial Paper Issuance Programme. The issuance aims to diversify financing options and meet short-term working capital and funding requirements.
The notice signed by its Company Secretary, Uto Ukpanah, said, “The issuance is part of the company’s strategy to diversify its financing options with the funds being deployed towards short-term working capital and funding requirements.”
The Secretary also promised to provide more details to the market later.
In recent months, MTN Nigeria raised N125 billion through the issuance of commercial papers series 6 and 7. It initially sought to raise N100 billion but recorded a 146% subscription rate, raising N125 billion across both series.
The series included a 181-day commercial paper at a yield of 13% and a 265-day CP at a yield of 13.50%. In the first nine months of 2023, MTN Nigeria recorded 21.8% revenue growth and added approximately 2 million subscribers, retaining its lead as Nigeria’s biggest telco by market size. As of September, the company’s mobile subscriber base had reached a new high of 77.6 million.
MTN Nigeria plans recapitalization after strong 9 months
MTN Nigeria has demonstrated impressive financial resilience. In its recently released financial results for the nine months ending September 30, 2023, the company reported a substantial 21.8% increase in revenue during the first nine months of 2023. This was despite macroeconomic challenges such as inflation and currency devaluation.
According to the report, the company issued its N250 billion commercial paper programme twice this year, once in March and then again in August. In September 2023, N52bn was redeemed, with the remaining tranches maturing in November 2023 (N72bn) at 12.5%, February 2024 (N52bn) at 13%, and May 2024 (N72bn) at 13.5%.
With the proposed issuance of the latest Series 8 & 9 commercial papers, the company aims to diversify its financing options, raise additional capital, and meet its short-term financing and funding requirements. The issuance also seeks to consolidate on the growth achieved in the last nine months.
As per the financial report, the net finance cost of the company has risen by 174.4% to N375.95bn. It added approximately 2 million users in the nine months under review, which resulted in a new high of 77.6 million mobile subscribers. However, there was a 42% decline in profit before tax, falling to N232.46bn. There was also a 45.2% decrease in earnings per share, which fell to N7.06kobo.
In the report released, the company also noted that 3.6 million active data users were added in the nine months as its total data traffic rose by 46.3% and data usage (GB per user) grew by 29.1%.
Also, its MoMo PSB active wallets witnessed a rise of 53.1% YoY and 15% QoQ, reaching 3.6 million users, which accounts for 40.6% of its fintech user base. The number of registered MoMo users has also increased to 27.9 million. Additionally, the transaction volume of MTN has experienced 47.6% YoY growth, indicating a positive trend in the ecosystem.
In the coming months, MTN Nigeria expects to face continued challenges due to several factors, including the removal of fuel subsidies, foreign exchange policies, the 2023 Finance Act, and global economic and geopolitical uncertainties.
However, the company says it remains committed to building resilience and promoting growth. This, it says, will be achieved through network expansion, acceleration of the MoMo PSB platform, and improving operational efficiency.
In the fourth quarter of 2023, the company plans to roll out Capex to achieve 83% 4G and 10% 5G population coverage. Additionally, the company will leverage additional spectrum to enhance network capacity, which is expected to support sustained growth in data traffic.
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