Dangote Sugar Refinery Plc, the largest sugar refinery in Sub-Saharan Africa is offering Commercial Papers worth N50 billion to investors in the money market beginning Tuesday.
DSR by the issuance hopes to raise N50 billion in fresh capital under its N150 billion Commercial Paper Issuance Programme.
The purpose of the capital raise, according to DSR, is to support its short–term working capital and funding requirements
“We are pleased to inform you of the launch of Dangote Sugar Refinery PLC (“DSR” or “the Company” or “the Issuer”) debut Series 1 Commercial Paper offer of up to N50 billion The Offer is NOW OPEN and scheduled to close Tuesday, 27 February 2024,’’ DSR disclosed in a statement.
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 55 percent 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.
Futureview Financial Services Limited said, “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 out-growers 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 top-line and bottom growth despite challenging macro headwinds.
Its strong revenue growth is evidenced by a CAGR of 28.0 percent 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 23.4 percent and 26.0 percent in gross profit and operating profit respectively, between 2018 and 2022. As of 9M ’23, DSR reported a y-o-y 7.42 percent growth in revenue.
