Home » Africa’s richest man Aliko Dangote’s cement firm to issue bonds under $721.6-million program

Africa’s richest man Aliko Dangote’s cement firm to issue bonds under $721.6-million program

by Omokolade Ajayi

Dangote Cement Plc, the leading cement manufacturer led by Africa’s richest man Aliko Dangote, has revealed interest to engage investors in the second issuance of bonds under its N300-billion multi-instrument issuance bond program.

The cement behemoth is ready to take advantage of the low-interest-rate environment on the Nigerian capital market, having received approval from its board of directors.

Aside from the gains coming from the strategic decision to reduce its operating cost, the group’s decision to access Nigerian capital markets for medium- to long-term debt funding is in line with its continued interest in engaging fixed-income investors.

In an effort to fast-track the issuance of the debt instrument, the cement company had submitted an application to the Securities and Exchange Commission in respect of the bonds, and relevant approvals have now been received.

The bonds will be issued as soon as possible, depending on market conditions, and the proceeds will be used to support expansion initiatives, refinance current short-term debt, and for general business reasons.

The board’s decision to engage fixed-income investors is a deliberate attempt to scale up its operations in line with the next phase of its expansion ambitions through finance to increase the top cement company’s intrinsic value.

Dangote Cement is Africa’s largest cement producer, producing 51.55 million tonnes per year across 10 countries, up from 48.55 million tonnes the previous year.

The cement behemoth’s profit increased by 33 percent from N276.06 billion ($663.5 million) in 2020 to N364.4 billion ($875.9 million) by the end of 2021 thanks to strong top-line growth and excellent cost-cutting tactics implemented by management.

The robust growth in earnings was triggered by a 33.8-percent increase in revenue from N1.03 trillion ($2.47 billion) to N1.38 trillion ($3.31 billion), driven by an increase in sales from 25.72 million tonnes to 29.27 million tonnes and pricing gains from the surge in the price of cement.

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