NIGERIA – Dangote Cement Plc, Africa’s largest cement producer, has announced the successful issuance of 50 billion Series 1 Fixed Rate Senior Unsecured Bonds under its new N300 billion (US$729m) Multi-Instrument Issuance Programme.
The bonds were issued on May 26, 2021, at coupon rates of 11.25%, 12.50% and 13.50% for the 3, 5 and 7-year tranches respectively.
Despite market headwinds, the bond issuance was well received and recorded participation from a wide range of investors including domestic pension funds, asset managers, insurance companies and high net-worth investors.
The proceeds of the bond issuance will be deployed for the company’s expansion projects, short-term debt refinancing and working capital requirements.
Aside from this first issuance of a traditional bond under the new Multi-Instruments Programme, Dangote Cement has registered a programme enabling it to consider different types of fixed income instruments to cater for different type of investors.
A statement from the Cement giant’s Deputy Company Secretary, Mr Edward Imoedemhe in Lagos quoted the Dangote Cement Chief Executive Officer, Michel Puchercos as commenting on the bond issuance, saying the ability to issue Green Bonds and Sukuk will enable the company to leverage the depth and breadth of the Nigerian market.
“This bond issuance allows us move a step further in achieving our expansion objectives and will be deployed to projects instrumental in supporting our export strategy while improving our cost competitiveness. We thank the investor community for their continued support in the management of Dangote Cement and their successful participation in the bond issuance”, he said.
The Bonds, which is expected to be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange, according to the company has Absa Capital Markets Nigeria acting as Lead Issuing House for the Series 1 Bonds.
It disclosed that Stanbic IBTC Capital, Standard Chartered Capital & Advisory Nigeria Limited, United Capital Plc, FBN Quest Merchant Bank, FCMB Capital Markets, Coronation Merchant Bank, Ecobank Development Corporation Nigeria, Futureview Financial Services, Meristem Capital Limited, Rand Merchant Bank, Quantum Zenith Capital and Vetiva Capital Management are the Joint Issuing Houses.
It operates a fully integrated “quarry-to-customer” business with activities covering manufacturing, sales and distribution of cement. We have a production capacity of 32.3Mta in our home market, Nigeria.
Its Obajana plant in Kogi State, Nigeria, is the largest in Africa with 16.3Mta of capacity across four lines; our Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta, and our Gboko plant in Benue state has 4Mta.
In addition, we have operations in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.5Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta).
Dangote Cement PLC. has a long-term credit rating of AAA by GCR and Aa2.ng by Moody’s due to its market-leading position, significant operational scale, and strong financial profile evidenced by the company’s robust operating and net profit margins relative to regional and global peers, adequate working capital, good cash flow, and low leverage.