Flour Mills of Nigeria seals US$64M Series 2 Commercial Paper

NIGERIA – Flour Mills of Nigeria Plc (FMN), one of the largest foods and agro-allied groups has announced that it has successfully repaid its N51.64 billion  (US$64M) Series 2 Commercial Paper.

This follows the earlier repayment of its N13.33 billion (US$17M)  Series 1 Commercial Paper in August 2023.

Commercial paper is an unsecured, short-term debt instrument issued by corporations.

In Nigeria, the CP market has remained a viable option for corporate entities looking to raise funds to meet shortfalls in their working capital needs, as well as other short-term expenditures, especially after the impacts of the COVID-19 pandemic.

Mr. Anders Kristiansson, the Group Chief Finance Officer expressed satisfaction with the timely and successful repayment of the Series 2 Commercial Paper.

He emphasized FMN’s commitment to financial prudence and acknowledged the confidence placed in the organization by the investing public.

Both the Series 1 and Series 2 Commercial Papers, totaling N64.97 billion (US$ 82M), were initially issued on February 22, 2023, under FMN’s N200 billion Commercial Paper Programme.

The Series 1, with a yield of 13.0%, raised N13.3 billion (US$17M), while the Series 2, with a yield of 14.0%, raised N51.64 billion (US$64M).

FMN launched its N200 billion (US$253M) Commercial Paper Programme on February 10, 2023, reflecting the company’s strategic financial planning.

According to Nairametrics, Flour Mills has a total external borrowing of about N303 billion (US$403M) as of December 2023 out of which about N52.8 billion are commercial papers and bonds. The company’s debt doubled within a year going from about N148 billion (US$197M) to N303 billion.

Kristiansson expressed gratitude to stakeholders for their continuous support, reiterating FMN’s dedication to delivering sustainable value and upholding the highest standards of corporate governance.

In addition to the successful repayment, FMN tapped into the market for its Series 3 Commercial Paper in June 2023, with subscriptions from banks and Pension Fund Administrators, contributing 39.7% and 40.8%, respectively.

The transaction was managed by FBNQuest Merchant Bank Limited as the Lead Arranger, with ChapelHill Denham Advisory Limited, FCMB Capital Limited, and United Capital PLC serving as Joint Arrangers.

Founded in 1960, the company has grown to become a leading producer of flour, pasta, noodles, edible oil, sugar, animal feeds, and other food products.

FMN also has significant investments in the agro-allied sector, such as farming, milling, storage, and distribution of grains and other crops.

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