Flour Mills set for part of N70bn bond issuance within two months

Flour Mills of Nigeria Plc said it would undertake a bond issuance in the next two months as part of a N70 billion programme to refinance existing debt, a group executive told Reuters on Monday.

Anders Kristiansson, group chief finance officer, said the plan was intended at leveraging low market rates, going further to say that Flour Mills had made moves to conserve cash following the coronavirus outbreak.

It would be recalled that the firm sold N30 billion commercial paper in April as part of strategies to mitigate the potential impact of the pandemic on its business.

‘We have a 70 billion bond programme. We are looking to tap into the market again given the low interest rate environment,’ Kristiansson said.

‘We anticipate coming to the market to refinance some of our existing debt by bring a bond to the market. We anticipate doing that in the next two months.’

Flour Mills stated it had recorded consistent growth in its food business and agro-business, noting that revenue grew by 15 per cent to N154.6 billion in the first quarter. It has roughly N75.8 billion in net debt as of the first quarter.

Yields on short-term bills and bonds have dropped below 6 per cent from double digits on account of excess liquidity on money markets as foreign investors dump assets to repatriate funds.

The company said it was seeking an organic growth strategy and proposed to enlarge its edible oil refinery at the same time widening the spread of its animal feed products.