MeCure Industries Plc: Key Takeaways from N10 Billion Commercial Paper Launch at 21% Yield
Table of Contents
Investment Opportunity: Series 6 Commercial Paper Details
Offer Structure and Size
Key Dates for Investors
Impressive Financial Performance (9M 2025)
Exceptional Revenue Growth
Surge in Operating Profit
Long-Term Growth Trend
Debt Management and Risk Assessment
Interest Coverage Ratio Analysis
Impact of New CP on Debt Service
Strategic Drivers for Future Growth
Favorable Government Policy (Presidential Executive Order)
Beta-Lactam Plant Expansion
Conclusion: The Investment Case
1. Investment Opportunity: Series 6 Commercial Paper Details
MeCure Industries Plc has launched a new Commercial Paper (CP) aimed at raising short-term capital, presenting an attractive opportunity for investors.
Offer Structure and Size
Issuance: N10 billion
Program: Part of a larger N40 billion CP programme.
Tenor: 269 days.
Discount Rate: 18.19%.
Effective Annual Yield: 21%, making it a highly attractive short-term investment.
Key Dates for Investors
Offer Open Date: December 9, 2025.
Offer Close Date: December 12, 2025.
Minimum Investment: N5 million, with subsequent investments in multiples of N1,000.
Settlement Date: December 14, 2025.
Maturity Date: September 26, 2026, when investors will receive their full returns.
2. Impressive Financial Performance (9M 2025)
MeCure’s financial results for the nine months (9M) ending September 30, 2025, show strong momentum, validating its operational strength and growth strategy.
Exceptional Revenue Growth
9M 2025 Revenue: N60.01 billion.Year-on-Year Growth:
98.6% increase compared to N30.22 billion in 9M 2024.
The 99% revenue increase significantly outperforms the company’s 3-year revenue Compound Annual Growth Rate (CAGR) of 31%.
Surge in Operating Profit
9M 2025 Operating Profit: Surged to N13.02 billion.
Year-on-Year Growth: A 159% increase from N5.03 billion recorded in 9M 2024.
This EBIT (Earnings Before Interest and Taxes) growth is a key indicator of the company’s ability to manage debt service obligations while expanding core operations.
3. Debt Management and Risk Assessment
Despite an increase in debt, MeCure demonstrates a current ability to service its obligations, though the new CP issuance will narrow the margin.
Interest Coverage Ratio Analysis
Current Ratio: The company’s current interest coverage ratio is 1.96x.
Interpretation: This indicates that the operating profit is nearly twice the amount required to meet current interest obligations.
Debt Composition: Commercial paper issuances now account for 53% of the company’s total debt.
Impact of New CP on Debt Service
Interest Expense Outlook: The Series 6 CP issuance of N10 billion is expected to increase the company’s interest expenses.
Projected Ratio: Assuming the current operating profit of N13.02 billion is maintained, the interest coverage ratio is expected to drop to 1.49x.
Conclusion: While notable, the revised ratio still indicates that MeCure can comfortably meet its interest payments, but with a narrower margin.
4. Strategic Drivers for Future Growth
MeCure is positioned to sustain its growth through favorable government policies and strategic capital investments.
Favorable Government Policy (Presidential Executive Order)
Benefit: MeCure is one of the select pharmaceutical companies granted duty waivers under the Presidential Executive Order.
Strategy: By sourcing raw and packaging materials from China and India, the company will leverage this policy to improve cost efficiency and operational competitiveness.
Beta-Lactam Plant Expansion
Project: The installation of the Beta-Lactam plant, completed in October 2023.
Purpose: The plant is dedicated to manufacturing Amoxicillin-Clavulanic acid (Amoxyclav), a leading antibiotic.
Market Impact: This drug addresses a significant market size exceeding N500 billion, and the plant’s output will continue to impact revenue positively.
5. Conclusion: The Investment Case
MeCure Industries Plc offers a compelling investment case, balancing impressive financial performance with a high-yield short-term debt instrument.
Strong Growth: Supported by near 99% revenue and 159% operating profit growth.
Attractive Yield: The Series 6 CP issuance provides an appealing 21% yield.
Solvency: While the debt burden and debt-to-equity ratio are rising, the company maintains a sufficient interest coverage ratio (1.49x projected) to comfortably meet its obligations.
These factors position the Series 6 CP issuance as a worthy short-term investment opportunity.
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