United Nigeria Airlines has raised ₦22 billion through the first tranche of its ₦100 billion commercial paper programme, exceeding its initial target of ₦20 billion following strong.
The airline disclosed that the issuance attracted subscriptions exceeding the target by more than ₦5 billion, prompting it to increase the amount raised by 10 per cent to ₦22 billion.
According to BusinessDay, the airline absorbed part of the excess subscription and refunded investors whose applications could not be fully accommodated.
The Managing Director of United Nigeria Airlines, Mazi Osita Okonkwo, said the strong response reflected investor confidence in the company’s business model, financial performance and growth strategy.
He explained that the funds would support fleet expansion and operational requirements as the airline continues to strengthen its presence in the aviation market.
The commercial paper issuance was structured into two series with tenors of 270 days and 364 days. It was also supported by credit ratings from Agusto & Co. and DataPro.
Agusto & Co. assigned the airline short-term and long-term ratings of A3 and BBB-, respectively, with a stable outlook, while DataPro awarded it A1 and BBB ratings for the same categories.
Managing Director of Meristem Capital Limited, Rasaki Salawu, described the transaction as the first commercial paper issuance by an airline in Nigeria.
He said the offering attracted different categories of investors, including asset managers, insurance companies and high-net-worth individuals.
Salawu added that the airline’s decision to limit the increase to 10 per cent, despite excess demand of more than ₦5 billion, reflected financial discipline.
United Nigeria Airlines currently serves 14 destinations across Nigeria and Ghana and is working towards expanding its regional operations.
The airline has also secured Global Distribution System agreements with Amadeus and Sabre, allowing travel agents worldwide to access its ticket inventory.
The successful fundraising provides the airline with additional financing to support its operational needs and expansion plans while introducing commercial paper as another funding option for Nigeria’s aviation industry.
