Cables, Wires Producer Coleman Opens N10bn CP for Subscription
Coleman Technical Industries Limited is offering investors an opportunity to earn income from its N10 billion commercial paper, which the company opens for subscription. The proceeds from the commercial paper issuance would be used to support Coleman’s working capital, according to Apel Securities Limited note to investors.
Apel told clients via email that the Series 13 & 14 commercial papers of up to ₦10 billion under its ₦30 billion commercial paper program is now available and scheduled to close on Friday, March 20, 2024. Series 13 with a tenor spanning 182 days attracts a discount rate of 19.83 percent, while Series 14 with a 270-day tenor is priced at 21.107 percent.
Coleman Technical Industries Limited is a 100% indigenously owned private limited liability company established on July 1, 1975, a note from Apel Securities Limited said. The company’s primary focus is the manufacturing of electrical wires and cables that meet international standards for various industries such as power, oil and gas, real estate, and infrastructure, according to Apel Securities.
Analysts said that since its inception, Coleman has been dedicated to developing local industries that create employment opportunities through the production of high-quality products.
Over its 47 years of operations, Coleman has become the largest producer of cables and wires in West Africa, solidifying its position as the industry leader in Nigeria. Apel Securities told investors that this achievement is attributed to its strong management team, which boasts over 150 years of combined industry experience.
In 2022, the company commissioned its fibre optic production line, Arepo III Project, valued at US$70 million, positioning Nigeria as the fifth-largest producer of fibre-optic cables in Africa, which continues to support the drive of the digital economy in the West African region.
With a production capacity of 162,000 metric tons per year, this factory enables Coleman to actively participate in the African Continental Free Trade Area leading to increased earnings, foreign exchange conservation, technology transfer, and the generation of direct and indirect employment opportunities for the local population.
The resurgence in the oil and gas sector and the drive for local content have also become catalysts for Coleman’s growth. This is evident from the contract of US$ 65 million annually secured by Coleman for the supply of cables to the Nigeria LNG Limited (NLNG) US$ 10 billion project for five (5) years ending in 2027.
The contract spans multiple products, including instrumentation cables, fibre-optic cables, and low- and heavy-duty electrical cables. Subsequently, Coleman has embarked on a backward integration project with the construction of a copper and aluminium smelter plant (Sagamu III Project) to minimise its exposure to raw material supply and foreign exchange risks.
According to Apel Securities, Coleman holds a long-term issuer rating of “BBB-” by GCR Ratings and “Bbb” by Agusto & Co. These ratings are supported by the company’s well-established market niche, diverse product portfolio, stable earnings, and cash flows.
It is also noted that the company has sustained a consistent string of financial successes in their 2023 management figures, with revenue increasing by 38% year on year to ₦54.15 billion. Its profit before tax surged 103% year on year to ₦13.72 billion, and total assets grew by 80% to ₦113.4 billion as of the end of 2023, according to the management.
The company’s return on equity for FY 2023 was 50%, highlighting its strong value creation for shareholders. As part of its strategic funding initiative, Coleman is seeking to raise working capital to support its short-term working capital requirements. #Cables, Wires Producer Coleman Opens N10bn CP for Subscription Banks Face Risks over 24hrs FX Positions Sell Down
