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The Central Bank of Nigeria (CBN) conducted a Retail Dutch Auction on August 6, 2024, where nine companies purchased a combined total of $25.76 million to meet their loan repayment obligations.
This auction is a critical part of the CBN’s strategy to reduce the demand pressure in the foreign exchange (FX) market and promote price discovery amid Nigeria’s ongoing economic challenges.
Loan repayments made up only about 3% of the $876.26 million sold by the CBN during the auction.
How much FX each firm purchased
Guinness Nigeria Plc emerged as the firm with the highest bid amount in the auction, purchasing $15.8 million at a bid rate of N1,540/$1.
This major player in Nigeria’s beverage industry, known for popular brands like Guinness Stout and Malta Guinness, sought the funds to manage its foreign loan obligations.
On the opposite end, Churchgate Investments Ltd, a real estate development company in Nigeria, purchased the smallest bid amount of $146,000 at a bid rate of N1,520/$1.
Other companies participating in the auction included Nucleus Ventures Ltd, which purchased $1 million through Access Bank Plc at a bid rate of N1,550/$1. Nucleus Ventures is a multifaceted business involved in trading and investment.
Tower Rolling and Galvanising Mills Limited and HIS (Nigeria) Limited also made significant bids, securing $3.31 million and $2 million respectively, at bid rates of N1,510 and N1,570 per dollar.
While Tower Rolling is a player in the steel manufacturing industry, HIS (Nigeria) Limited is into training, recruitment services and project management.
Crown Flour Mills – AFP purchased $2 million at a bid rate of N1,575/$1 through Keystone Bank Plc. As a significant entity in Nigeria’s food and agriculture sector, Crown Flour Mills secured these funds to repay foreign loans that are vital for their extensive operations, including production and distribution within the country.
Tower Alloys Industries Limited and African Foundries Ltd., both from the manufacturing sector, purchased $500,000 each at a bid rate of N1,510/$1.
Lastly, Int Towers Limited, a subsidiary of IHS Towers, telecommunications infrastructure provider, purchased $500,000 at a bid rate of N1,570/$1 through Standard Chartered Bank.
