Dangote Sugar Refinery Plc (DSR) has commenced the offering of its series 1 Commercial Paper (CP) of up to N50billion. The offer which opened on Thursday February 22 is scheduled to close Tuesday February 27, 2024.
Stanbic IBTC Capital is the Lead Arranger of the Commercial Paper while Absa and Greenwich Merchant Bank are the Joint Arrangers.
The net proceeds will be used to support Dangote Sugar Refinery Plc short-term financing requirements and general corporate purposes.
The series 1 Commercial Paper (266 days tenor) offered at a discount rate of 15.9188percent and implied yield of 18.001 percent will mature on November 20, 2024.
The Series 1 CP is under Dangote Sugar Refinery Plc N150billion Commercial Paper Issuance Programme. The CPs issued under the Programme will be repaid from the cash flows of DSR. The Issuer has been assigned a rating of “Baa3.ng” from Moody’s.
Dangote Sugar Refinery Plc (DSR) is Sub-Saharan Africa’s largest sugar refinery, with a combined installed refining capacity of 1.44 million metric tonnes per annum and a market share of about 55percent in the retail space.
The Company is a subsidiary of the Dangote Group and is engaged in the refining, distributing, and marketing of granulated sugar to wholesalers and top players in the skin care, food and beverage, and pharmaceutical industries.
DSR is on track to becoming a leading global integrated sugar producer with its backward integration plan – target 0.7MMT refined sugar production, expansion of outgrowers scheme and strategically seeking to expand existing warehouses and fleet of over 800 haulage trucks to cover target markets in Nigeria and West Africa.
The Company has 47,364 hectares of sugar plantation and aims to produce 1.5 million metric tonnes of refined sugar annually from its sugarcane in the medium term.
“Historically, DSR has reported a solid financial performance with both topline and bottom growth despite challenging macro headwinds. Its strong revenue growth is evidenced by a CAGR of 28percent between 2018 and 2022 on account of improving operational efficiency, improving customer service delivery, and maintaining the high quality of its products.
“Additionally, the Company’s growth in profitability is shown in its CAGR of 23.4percent and 26 percent in gross profit and operating profit respectively, between 2018 and 2022. As of 9M’23, DSR reported a year-on-year (y-o-y) 7.42percent growth in revenue,” Futureview Research said in their February 22 note to investors.
