Reports show that the Dangote Group is considering the sale of a 12.5% stake in the newly commissioned refinery to meet its financial obligations.... CLICK TO READ THE FULL NEWS HERE▶▶
The global rating agency, Fitch Ratings, made this known in its report on the refinery.
Recall that the Nigeria National Petroleum Company Limited (NNPC) bought a 7.25% stake in the facility for $1 billion, with an option to buy the remaining 12.75% stake by June 2025.
The report revealed that since the national oil firm could not complete the stake acquisition, the Dangote Group plans to put the 12.75% stake for sale.
According to Fitch, the Dangote Group wants to service its syndicated loan maturing in August 24 from the equity divestment, but it expressed doubts the group would meet the obligation.
Fitch said: “Further delays in meeting the funding requirements would significantly increase the likelihood of financial restructuring or default and lead to further rating downgrade.”
According to reports, the $20 billion facility operated at about 50% capacity in the first six months of this year, producing about 325,000-375,000 barrels of petroleum products daily.
It added that the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) contribution from the Lagos-based refinery has been below its previous projection as it ramps production.
Reports say the refinery has secured debt raised at subsidiary levels amounting to $2.7 billion at the end of 2023, representing 49% of the total debt.
“We view the shareholder loans as subordinated debt. The company has also raised senior unsecured debt amounting to N350 billion with long-dated maturities in 2029 and 2032 to finance capex requirements,” parts of the report read.
