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Dangote Industries is exploring the sale of a 12.7% stake in its flagship refinery to address mounting financial pressures, according to a report by Fitch Ratings. This move comes as the conglomerate seeks to service a significant syndicated loan maturing in August 2024.
Initially, the Nigerian National Petroleum Company (NNPC) had expressed interest in acquiring a 20% stake in the refinery, with an initial 7.25% purchase completed in 2021. However, the oil giant has opted not to exercise its option for the remaining 12.75%.
Fitch has raised concerns about the timing of the planned divestment, highlighting the uncertainty surrounding its completion before the loan maturity date. The successful sale of the stake is crucial for Dangote Industries to meet its financial obligations and maintain its creditworthiness.
“Since the option has not been exercised, the group plans to divest a 12.75 per cent stake in DORC in 2024.
āThe group intends to service its significant syndicated loan maturing in August 2024 from the equity divestment. However, timely divestment and meeting the imminent maturity are highly uncertain in our view,ā Fitch said.
The decision to offload part of the refinery’s ownership could signal potential challenges in the operations or financial performance of the plant. Investors will be watching closely to assess the implications of this development on the refinery’s future and its impact on the broader Nigerian petroleum sector.
While the sale could provide much-needed liquidity for Dangote Industries, it also raises questions about the long-term strategic direction of the refinery. The identity of the new investor and the terms of the deal will be key factors in determining the overall impact on the Nigerian economy.
Tags: Dangote, Fitch, NNPCL, Mele Kyari, Nigeria, Aliko Dangote, Bola Tinubu, Economy, Oil Sector
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