Dangote Cement raises N50bn bond to fund expansion

Dangote Cement Plc has announced its successful issuance of a N50 billion Series 1 Fixed Rate Senior Unsecured bond under its new N300 billion multi-instrument issuance programme.

The leading cement manufacturing firm said in a statement that 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.

According to the company, the proceeds of the bond issuance will be deployed for its expansion projects, short-term debt refinancing and working capital requirements.

The bonds were issued at coupon rates of 11.25 per cent, 12.50 per cent and 13.50 per cent for the 3, 5 and 7 years tranches respectively.

The statement quoted the Chief Executive Officer, Dangote Cement, Michel Puchercos, as saying the ability to issue Green Bonds and Sukuk will enable the company 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 bond is expected to be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange.

Dangote Cement Plc is Sub-Saharan Africa’s largest cement producer with an installed capacity of 48.6Mta capacity across 10 African countries. 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; its 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, the company has 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 cashflow, and low leverage.