Aden River Estates Limited, a palm oil producer of over five decades in operation, has launched its maiden debt capital market transaction, signing a N250 million Series 1 (Tranche A and B) commercial paper (CP) under a N20 billion CP issuance programme, with Anchoria Advisory Services Limited as the issuing house.

The signing ceremony, held in Lagos, marked the first time the company – incorporated in 1969 and described as Nigeria’s first indigenous large-scale oil palm plantation operator – has accessed the capital market in its 55-year history. The Series 1 issuance carries yields of 22 per cent and 25 per cent for Tranche A (270 days) and Tranche B (364 days) respectively, with the 364-day instrument drawing all investor subscriptions.

Chief Executive Officer of Aden River Estates, Emmanuel Ibru, described the N250 million raise as a deliberate market-entry move ahead of more substantial offerings.

“We plan to raise about N20 billion over a period of time, which will be ploughed back into the company to scale up,” he said, adding that the company intends to follow the commercial paper with a bond issuance, likely within nine months.

Proceeds from the Series 1 offering are earmarked for working capital. The company’s medium-term investment target is approximately $50 million, to be sourced from a combination of debt, equity and internally generated funds.

Aden River Estates currently holds a land bank of approximately 7,000 hectares, spread across its Ohosu and Okoro plantations in Edo state. The company’s five-year expansion roadmap includes the installation of a 30-tonne-per-hour palm oil mill to accommodate increased fresh fruit bunch volumes. It is also developing a Palm Kernel Oil extraction unit to diversify revenue streams.

Head of Financial Advisory at Anchoria Advisory Services, Funmilayo Abdulrahman, confirmed that the issuance was successfully subscribed, despite institutional investors facing regulatory constraints on participation at the N250 million deal size. She attributed the company’s market eligibility to its Triple-B credit rating from Datapro, an investment-grade assessment and revenue performance exceeding N1 billion annually.

“The issuer insisted on N250 million, and based on the financials that we have and what we’ve looked at year-on-year, once they can repay it,” she said.

On pricing, Abdulrahman explained that yield determination followed standard market convention, with the risk-free rate serving as the base and a risk premium layered on top according to the issuer’s credit profile.

“For an entity rated Triple B, what should be the additional premium the investors will pay? So usually, we do that and check similar instruments within the industry,” she said.

The transaction’s legal counsel and global chairman of TOLG Advisors, Mike Orimobi, said his firm had worked with Aden River Estates for close to a year to restructure the business and achieve capital market readiness before the deal could be executed.

He noted that the company carried no meaningful debt before the issuance and that the signing also carried a mandate to pursue a bond issuance programme, giving the company access to both short-term and medium-to-long-term instruments.

Ibru argued that the broader investment case for the company was inseparable from Nigeria’s palm oil supply-demand deficit. Nigeria, currently the world’s fifth-largest palm oil producer, produces approximately 1.5 million tonnes annually against domestic demand exceeding two million tonnes, leaving the country spending between $500 million and $600 million yearly on imports. Indonesia and Malaysia — the top two global producers- are simultaneously constrained by exhausted land banks and replanting cycles, a dynamic that Ibru said would tighten global supply over the next several years.

“Our demand is in excess of two million tonnes. You understand how important it is,” he said.

Anchoria and TOLG Advisors both indicated that larger capital market transactions from Aden River Estates are expected before year-end.