Again, MTN Nigeria commercial paper oversubscribed

• MTN Nigeria has recorded another oversubscription of its Commercial Paper
• The Series 13 and 14 Commercial Paper issuance exceeded the initial N50 billion target by 144 per cent to reach N72.18 billion
• MTN Nigeria hopes to shore up its capital through the Commercial Paper Issuance Programme

MTN Nigeria Communications Plc has announced the successful completion of its Series 13 and 14 Commercial Papers (CP) issuance, which saw a 144 per cent oversubscription to N72.18 billion.

According to a formal notification signed by its Company Secretary, Uto Ukpanah, and published on the Nigerian Exchange (NGX) disclosure platform, the company noted that the commercial paper was oversubscribed by N22.18 billion from the initial target of N50 billion.

The telecommunication giant issued the Series 13 and 14 CPs on Friday, November 29, as part of efforts to broaden its funding sources under its N250 billion Commercial Paper Issuance Programme.

The Commercial Paper offered competitive yields of 27.50 per cent for the 181-day paper and 29.00 per cent for the 265-day paper and attracted a wide range of investors.

In his comments, the Chief Executive Officer of MTN Nigeria, Karl Toriola, appreciated the support of the investor community that led to the oversubscription of the commercial papers.

Toriola noted that the level of subscription of the commercial papers amidst a challenging macroeconomic situation is a demonstration of investors’ confidence in the brand.

He said, “We are pleased with the support received from the investor community, having recorded 144 per cent subscription with participation from a broad range of investors.

“This further reinforces MTN Nigeria’s financial position, brand strength and market leadership amidst the challenging macro conditions.”  

Stanbic IBTC acted as the Lead Arranger and Dealer, and CardinalStone, Chapel Hill Denham, Cordros, Coronation, FCMB, Meristem, Quantum Zenith, and Rand Merchant Bank as Joint Dealers.

MTN Nigeria’s Series 11 and 12 CPs were oversubscribed

Recall that MTN Nigeria, on November 15, announced the 150 per cent oversubscription of its Series 11 and 12 CPs to the tune of N75.18 billion.

The Series 11 and 12 CPs were issued on November 7, 2024, under MTN Nigeria’s N250 billion Commercial Paper Issuance Programme and initially targeted N50 billion.

CP issuance aims to diversify MTN Nigeria’s funding sources

The commercial paper route is part of MTN Nigeria’s effort to broaden its funding sources, as it plans to allocate proceeds from the issuances to strengthen short-term working capital and support its financial plans.

It said funds from this issuance will be channelled towards improving operational efficiency and growth initiatives, particularly on expanding infrastructure, improving service delivery, and addressing the rising demand for telecommunications and digital services nationwide.

The company hopes that this approach will be effective in strengthening its liquidity position and address changing market conditions.

MTN Nigeria’s stocks and finances suffered a decline

The stocks of MTN Nigeria suffered declines in 2024 after maintaining a moderate long-term sentiment.

The company’s stocks opened the year’s trading at N264 with a total market volume of 52 million shares recorded for the month. However, the stocks suffered a decline within the year, reaching N170 as of the market opening on November 27, 2024.

Factors such as foreign exchange-related pressures have affected the telecommunications sector, increasing operational costs and probably dampening investor sentiment.

The telecommunication giant also lost N514.9 billion after tax in the nine months of 2024 to naira depreciation, which increased its foreign currency-denominated obligations.

According to its unaudited results for the nine months ended September 30, 2024, the company suffered a 3,335 per cent loss from the N15.0 billion loss recorded in the same period of 2023.

The loss consequently impacted the company’s retained earnings and shareholders’ equity, which amounted to N723.0 billion and N573.6 billion, respectively, as of September 2024.

The telco’s subscriber base also declined by 0.9 per cent to 77.0 million within the nine months. The decline is attributed to the recent National Identity Number (NIN)-SIM card verification exercise mandated by the Federal Government, which led to the deactivation of 64.3 million lines not linked to NIN.

There are indications that the telco may hike tariffs to mitigate the impact of losses occasioned by the continued depreciation of the naira.

Recall that MTN Nigeria’s CEO, Karl Toriola, had warned of the company’s imminent shutdown if the telecommunications tariff is not hiked, noting that the company, despite its seven per cent contribution to Nigeria’s Gross Domestic Product (GDP), now operates on its reserves, which is not sustainable over time.

MTN introduces recyclable SIM cards to promote sustainability in Nigeria

Meanwhile, TheRadar reported that MTN Nigeria announced the introduction of paper-based, biodegradable, eco-friendly SIM cards in line with its Project Zero goals to reduce greenhouse gas (GHG) emissions and achieve net zero emissions by 2040.

According to the company, the biodegradable paper-based SIM card is safer for the environment, as it supports the management of products throughout their lifecycle in a manner that promotes circularity and reduces waste.