We use cookies to ensure that we give you the best experience on our website. Find out more in our Privacy & Cookie Policy. By using our website, you agree to our using of cookies.
I agree
Dangote Sugar Refinery seeks US$32.28M via commercial papers to support operations
Published
NIGERIA – Dangote Sugar Refinery Plc (DSR) has announced plans to raise N50 billion (US$32.28M) from the debt capital market through the issuance of Series 6 and Series 7 commercial papers under its N150 billion debt programme.
According to Market Watch, the Series 6 commercial paper, which has a 180-day tenor, is offered at a 24.9889 percent discount rate, translating to an implied yield of 28.5 percent.
The Series 7 commercial paper, with a 270-day tenor, is priced at a 24.5524 percent discount rate, providing an implied yield of 30 percent.
Investment banking firms have confirmed that the offering will remain open to investors until December 12, 2024. The proceeds from the issuance are earmarked to support the company’s working capital and other operational funding needs.
A subsidiary of Dangote Industries Limited (DIL), Dangote Sugar Refinery is a leading player in Sub-Saharan Africa’s sugar industry, refining and distributing granulated sugar to wholesalers as well as the skincare, food and beverage, and pharmaceutical industries.
With an installed refining capacity of 1.49 million metric tonnes per annum, DSR is Sub-Saharan Africa’s largest sugar refinery.
The company is also advancing its backward integration program, aiming to produce an additional 1.5 million metric tonnes of refined sugar from locally grown sugarcane in the medium term. This initiative seeks to position DSR as a globally integrated sugar producer.
Despite achieving revenue growth of 56 percent to N484.4 billion (US$307.1M) in the first nine months of 2024, compared to N309.7 billion (US$196.35M) during the same period in 2023, the company recorded an after-tax loss of N184.4 billion (US$118.9M).
The decline is largely attributed to a 176 percent surge in finance costs, which rose from N108.7 billion (US$70.3M) to N300.2 billion(US$194.2M), coupled with disruptions in the supply chain and fluctuating sugar prices.
DSR’s commercial paper issuance aims to stabilize operations amid these financial and market challenges.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
