Dangote Sugar Offers 20.80% Discount on 265-Day Commercial Paper to Raise ₦100 Billion

Dangote Sugar Refinery Plc has launched a new commercial paper issuance, offering investors a 20.80% discount rate on its 265-day tenor as it moves to secure funding from the debt market to bolster working capital.

According to details from the offer memorandum obtained, the company plans to raise ₦100 billion through three separate tenors under its broader ₦300 billion commercial paper programme.

The short-term debt issuance includes:

A 90-day note with a 19.97% discount rate and an implied yield of 21%

A 174-day paper carrying a 20.73% discount rate and yielding 23%

A 265-day instrument with a 20.80% discount rate

The offering officially opened on Monday and will close on Wednesday, June 25, 2025.

The sugar refining giant, a subsidiary of Dangote Industries Limited, intends to use proceeds from the issuance to address its operational funding needs. Dangote Sugar is known for refining, packaging, and marketing granulated sugar, supplying major wholesalers and businesses across key sectors including food and beverage, pharmaceuticals, and personal care.

With an annual installed capacity of 1.49 million metric tons (MMT), the company is recognised as sub-Saharan Africa’s largest sugar refinery. It is also pursuing an aggressive backwards integration strategy aimed at producing an additional 1.5MMT of refined sugar from domestically grown sugarcane.

The company’s long-term vision is to evolve into a globally competitive integrated sugar producer. Its backwards integration plan includes investments in agriculture and local processing to reduce import dependency and increase sustainability in Nigeria’s sugar value chain.

Investors are increasingly turning to commercial papers as an attractive fixed-income instrument amid high-interest rate environments, and Dangote Sugar’s latest offer is expected to garner significant attention from institutional buyers seeking short-term yields.