MTN Nigeria set to raise another N50bn through commercial papers after previous successful editions

Leading mobile network operator, MTN Nigeria Communications has announced plans to issue Series 15 and 16 of its Commercial Papers (CP). While notifying the Nigerian Exchange (NGX) and the public, the company stressed that 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.

The telecoms company stressed that 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 (‘MTN Nigeria’ or the ‘Company’) 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 ‘Issuance’),” 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. 

MTN Nigeria’s financial stance 

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% to 77 million. Also, the number of MoMo wallet subscribers reduced by 21.8% 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% 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.

Amidst its stumbling outlook, MTN Nigeria was ranked as the network with the fastest download and upload speed in West and Central Africa according to Ookla’s Speedtest Intelligence data report in early December. According to the report, MTN Nigeria was able to achieve this feat thanks to its 5G network.

Also, the telecoms giant hit a download speed of 95.62 Mbit/s, largely attributed to its 5G network. This significantly widened its lead over the other subsidiaries in the region in terms of download speeds, especially the Ghanaian subsidiary, its closest competitor. 

MTN Nigeria is also reported to have trumped other subsidiaries’ median upload speed, hitting 17.01 Mbit/s. This is a significant gap compared to the 16.74 Mbit/s achieved by MTN Ghana. The report also noted that all the subsidiaries that were reviewed witnessed growth in their performances. 

Read More: MTN Nigeria has the fastest internet speed among MTN subsidiaries in West and Central Africa.