MTN Nigeria Communications Plc is set to raise N50 billion through a commercial paper issuance as part of its broader N250 billion issuance program. The Series 11 and 12 commercial papers aim to support the telecom company’s short-term working capital and address immediate financial needs. This move reflects MTN’s strategy to tap into the debt market as a flexible funding source, reducing reliance on long-term loans and balancing its capital structure.
The funds raised will be used to enhance MTN’s operations, including infrastructure expansion and meeting the growing demand for telecommunications services in Nigeria. With negative working capital of about N1.49 trillion, the company aims to use the N250 billion CP programme to manage cash flow, offset interest costs, and reduce short-term debt reliance. This strategy is critical in navigating Nigeria’s challenging economic landscape, marked by high inflation and currency depreciation.
MTN’s reliance on commercial papers for liquidity is evident, following recent successful issuances, including N72.1 billion raised in December 2023. Despite some financial setbacks, MTN reported a profit after tax of N4.13 billion in Q3 2024, demonstrating recovery potential. The issuance of Series 11 and 12 is expected to further stabilize MTN’s finances while helping to manage short-term debt and enhance its liquidity position.
