Dangote Cement to issue new bond series under $180.5 million program

Feyisayo Ajayi -
Key Points
  • Dangote Cement seeks board approval for a new bond issuance under its N300 billion ($180.5 million) program to strengthen financial and operational efficiency.
  • Proceeds from the bond issuance will refinance debt and support working capital, contingent on favorable market conditions.
  • Despite challenges, Dangote Cement’s 2024 revenue surged 85.1%, driven by operational improvements and increased market activity.

Dangote Cement Plc, the leading cement manufacturer majority-owned by Africa’s richest man, Aliko Dangote, has received board approval to issue new bonds series under its N300 billion ($180.5 million) multi-instrument issuance program. The move aims to bolster the company’s financial strength and improve operational efficiency.

The issuance, which will tap Nigeria’s domestic capital markets, is contingent on favorable market conditions. Proceeds will be used to refinance existing debt and support working capital requirements, a strategic step to strengthen the company’s balance sheet.

Strategic move amid market conditions

This bond issuance follows a filing with the Securities and Exchange Commission, securing all necessary regulatory approvals. Dangote Cement’s decision to raise funds through debt reflects a broader trend among Nigerian companies utilizing such instruments to address financing challenges in a capital-constrained environment.

The company’s recent performance highlights its resilience despite market challenges. In the first half of 2024, Dangote Cement reported an 85.1 percent increase in revenue, rising from N942.7 billion ($586.4 million) in 2023 to N1.76 trillion ($1.1 billion). This growth is attributed to improved operational efficiency and a surge in market activity.

Industry leadership and expansion

Dangote Cement, valued at N8.02 trillion ($4.9 billion), continues to dominate Nigeria’s cement industry, having significantly reduced the country’s reliance on imports. The company is now a major exporter of cement to countries like Cameroon, Congo, and Ghana, further cementing its position as a regional industrial powerhouse.

With a production capacity of 52 million tonnes annually, Dangote Cement remains Sub-Saharan Africa’s largest cement producer. The Series I bond issuance is part of the company’s long-term strategy to maintain its market leadership, leverage innovative financing, and achieve sustained growth in a dynamic economic environment.