Nigeria’s Biggest Miller eyes $138 million bond-sale to boost working capital

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By Emele Onu

Firm considers issue at yield of about 11% vs 16% previously
Rates have fallen since central bank curbed purchases of OMOs

Flour Mills of Nigeria Plc, the country’s biggest miller by market value, has revived plans to sell bonds to refinance debt and bolster working capital as borrowing costs decline in the West African nation.

The company is looking to raise as much as 50 billion naira ($138 million) via the securities, of which 20 billion naira is planned in the first quarter, Chief Financial Officer Anders Kristiansson said by phone Tuesday.

Yields on Nigerian debt have dropped since the central bank in October restricted the purchase of its highest-yielding, short-term OMO securities to banks only, barring individuals and other institutions. The yield on the government’s benchmark 30-year bond due in 2049, last week dropped to the lowest since its issue in July.

Flour Mills may issue the debt at about 11% with a tenor of as long as five years, Kristiansson said.

The Lagos-based firm announced a 70 billion naira capital-raising program in 2017 and a year later issued 20 billion naira of three- and five-year securities with coupons of 15.5% and 16%, respectively. It also raised 40 billion naira via a rights issue.

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