Coleman completes N70bn programmes to expand manufacturing capacity
Coleman Technical Industries Limited has completed the launch of an N50bn bond programme after its N20bn commercial paper (CP) programme earlier in the year, in its bid to expand its manufacturing capacity.
The cables and wires manufacturer launched the bond programme, with Coronation Merchant Bank as lead issuing house on the transaction at its head office in Ogun State.
According to the FMDQ Exchange, this comes after its N20bn CP, of which two tranches of N150m and N3.8bn respectively have been released to fund its working capital requirements.
It was gathered from the Head of Investment Banking at Coronation Merchant Bank, Suru Daniels that the firm had to set up a special purpose vehicle, Coleman Funding SPV Plc, to access the capital market without compromising its governance as a private firm.
He said, “This enables Coleman to access the capital market anytime within the next three years with friendly interest rates.
“Its capacity utilisation can be optimised and it will no longer be hindered by capital expenditure or working capital-related challenges, at least to the extent of the programme that has been established.”
The Chief Executive Officer and Managing Director, Coleman, George Onafowokan, noted that the company currently sourced 80 per cent of its raw materials in-country through its backward integration drive, reducing its dependence on foreign exchange.
He said, “When we looked at all the financing options, we saw that going this path was the best for our financing mix to grow our business, and the way you get your average cost down is to get different financing methods and instruments in your portfolio.”
