Dangote group plans to raise N21.2 billion

Dangote Sugar Refinery, (DSR )Plc, has made plans to raise N21.2 billion through equity penetration from the capital market to fund its backward integration project and also meet up with the Dangote Sugar Master Plan.

The Group Managing Director, Mr. Abdullahi Sule, who made the revelation yesterday, at the company’s ‘facts behind the figure’ presentation at the Nigerian Stock Exchange, (NSE),said the fresh capital would be raised before the end of 2017 financial year.

He further explained that the N21.2 billion will make part of the N106 billion budgeted by the company to finance its operations within the next six years, adding that the Board of Directors was in the process of finalising plan for the capital raising and to decide the right mix of funding.

He said that the DSMP is in two phases, with the first phase targeting production of 690,000 MT of sugar across five sites in Adamawa and Kebbi States, while the second phase will result in production of 881,000 MT of sugar and creation of 75,000 jobs.

Sule stated“Dangote Sugar is a zero debt company for all these number of years. But it is also a company that still has some sizeable amount of cash. Therefore, we decided that in this first three years that we have budgeted that we are going to spend roughly N106 billion on the project and out of that, the Board members decided that 20 per cent is going to be equity."

He continued by adding that as a group, they believe that between now and the end of the year, they should be able to fund the 20 per cent, and that's it is taking them time actually to make final decision about coming to the market.

‘The bottom-line, actually, is that you have no fears because your company is in a position to borrow if we decide to go borrowing and most likely still pay some dividend while we are on the way borrowing,” he assured.

 He concluded that shortages in gas supply, which forced it to switch to high cost LPFO, increases in prices of raw materials as well as foreign exchange challenges resulted in 100 per cent rise in cost of sales in the first quarter ended March, 2017.