MTN Nigeria has announced plans to raise N50 billion through Series 11 and 12 commercial paper issuances, marking a strategic step to boost its liquidity and manage short-term funding needs. Under its N250 billion Commercial Paper Issuance Programme, MTN aims to enhance working capital, reduce reliance on long-term debt, and address the demands of Nigeria’s challenging economic climate.
The telecom giant’s current loan obligations exceed N1 trillion, with more than N522.3 billion due in short-term liabilities, according to MTN’s latest financial disclosures. This move to issue commercial paper highlights MTN’s focus on maintaining operational cash flow while limiting its long-term debt exposure. Financial analysts, like Lagos-based expert Ayo Aluko, see MTN’s strategy as a balanced approach that provides financial flexibility and aids in meeting immediate cash demands.
MTN has consistently tapped into the debt market, with recent commercial paper issuances raising N72.1 billion in December 2023 and N52.9 billion in November 2023. These funds helped MTN navigate working capital needs and continue its telecom and digital expansion across Nigeria. Ifeoma Eze, a telecom sector analyst, believes this method allows MTN to manage its cash flow in a high-interest rate environment while avoiding the limitations of traditional loans.
The company’s financial report from Q3 2024 shows a negative working capital of roughly N1.49 trillion, highlighting the importance of flexible financing solutions like commercial paper to meet short-term financial demands. MTN’s N250 billion Commercial Paper Programme provides the flexibility to issue funds in multiple series, a valuable option for adapting to cash flow requirements.
With investor interest piqued, MTN is set to disclose further details on the Series 11 and 12 notes soon. This proactive debt strategy aims to solidify MTN’s market position, support its capital investments, and maintain operational stability in Nigeria’s volatile economic environment.
