J
Joshua Fagbemi
Guest
MTN Nigeria Communications has announced strategic plans to meet its financial needs. Under its N250 billion Commercial Paper Issuance Programme (CP), the company is set to raise N50 billion.
In a message to the Nigerian Exchange Limited and the investing public, the telecommunication giant said that the Series 11 and 12 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.
Meanwhile, MTN Nigeria’s financial statement dated September 2024 shows it has a negative N1.49 trillion working capital. The funds are, therefore, 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.
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 for the purpose of working 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.
By raising additional funds through the Series 11 and 12 CPs, MTN Nigeria aims to address its immediate working capital needs. During the process, it also seeks to alleviate part of its short-term loan burden.
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.
In a Nigerian economy characterized by several financial challenges, the plans place MTN Nigeria in a better position to withstand economic storms. Additionally, the issuance also serves the broader purpose of diversifying MTN Nigeria’s financing sources, reducing reliance on bank loans, and maintaining a balance between short- and long-term debt.
Though the company has yet to announce specific terms of the Series 11 and 12 notes, it is expected to share more details in the coming weeks.
In the first nine months of 2024, MTN Nigeria Communications reported a big loss in its financial results. According to the company, the business has experienced huge pressure owing to the country’s macroeconomic, regulatory, and currency fluctuations.
The company reported a 28% decline in its capital expenditure and accumulated an after-tax profit of N118.5 billion within the period. Factoring in forex losses, MTN Nigeria further 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. Meanwhile, it recorded a 21.9% increase in its positive free cash flow to N536.8 billion.
Moreover, the company’s EBITDA margin (earnings before interest, taxes, depreciation, and amortization) slumped by 14.9% points to 36.3%.
Also, MTN 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.
At the same time, the company reported that it is being owed N250 million by Nigerian banks from its Unstructured Supplementary Service Data (USSD) rendered to bank customers. Consequently, the mobile network operator is seeking regulatory approval to halt its USSD services for banking transactions unless the impasse is resolved.
Read More: MTN Nigeria Suffers N514bn Forex.
The post MTN Nigeria to raise N50bn through commercial papers to strenghten its working capital first appeared on Technext.
In a message to the Nigerian Exchange Limited and the investing public, the telecommunication giant said that the Series 11 and 12 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.
Meanwhile, MTN Nigeria’s financial statement dated September 2024 shows it has a negative N1.49 trillion working capital. The funds are, therefore, 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.
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 for the purpose of working 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.
By raising additional funds through the Series 11 and 12 CPs, MTN Nigeria aims to address its immediate working capital needs. During the process, it also seeks to alleviate part of its short-term loan burden.
Raising funds through commercial paper: what you should know
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.
In a Nigerian economy characterized by several financial challenges, the plans place MTN Nigeria in a better position to withstand economic storms. Additionally, the issuance also serves the broader purpose of diversifying MTN Nigeria’s financing sources, reducing reliance on bank loans, and maintaining a balance between short- and long-term debt.
Though the company has yet to announce specific terms of the Series 11 and 12 notes, it is expected to share more details in the coming weeks.
MTN Nigeria’s debts and losses in 2024
In the first nine months of 2024, MTN Nigeria Communications reported a big loss in its financial results. According to the company, the business has experienced huge pressure owing to the country’s macroeconomic, regulatory, and currency fluctuations.
The company reported a 28% decline in its capital expenditure and accumulated an after-tax profit of N118.5 billion within the period. Factoring in forex losses, MTN Nigeria further 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. Meanwhile, it recorded a 21.9% increase in its positive free cash flow to N536.8 billion.
Moreover, the company’s EBITDA margin (earnings before interest, taxes, depreciation, and amortization) slumped by 14.9% points to 36.3%.
Also, MTN 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.
At the same time, the company reported that it is being owed N250 million by Nigerian banks from its Unstructured Supplementary Service Data (USSD) rendered to bank customers. Consequently, the mobile network operator is seeking regulatory approval to halt its USSD services for banking transactions unless the impasse is resolved.
Read More: MTN Nigeria Suffers N514bn Forex.
The post MTN Nigeria to raise N50bn through commercial papers to strenghten its working capital first appeared on Technext.