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Fitch Ratings, a global provider of credit ratings, has paused monitoring Dangote Industries.

The firm recently announced its decision to stop rating for Dangote Refinery after seeing the Nigerian conglomerate under negative watch due to refinancing bottlenecks.

Fitch had stressed that the decision was made for commercial reasons. However, in its last report, the agency had placed Dangote Industries under Rating Watch Negative, signalling a possible downgrade due to the companys difficulties in meeting its financial commitments.

Operating across cement, oil refining, and fertilisers, the group is under increasing pressure to restructure its debt while still needing significant liquidity.

Fitch noted that the issue remains unresolved due to the ongoing refinancing of the companys maturing debt.

It added that to avoid a liquidity crisis that could derail its expansion plans”especially in oil refining”Dangote must urgently secure new funding sources.

Fitchs decision does not mean Dangote is in default, but it raises serious questions about its ability to refinance on favourable terms. Without a credit rating, securing loans from international investors and lenders could become more expensive, as many rely on ratings to gauge credit risk. Higher interest rates or reduced access to funding could add further strain on the companys finances.

Amid the hiccups, Dangote is not sitting idle. Reliable sources close to the matter say the group is in advanced talks with creditors to extend debt maturities and secure better refinancing terms. If it succeeds in stabilising its cash flow, it could quickly regain market confidence.

Despite this, other ratings agencies like Moodys and S&P Global Ratings are expected to continue assessing Dangote Industries.

Meanwhile, financial experts believe that Fitch’s withdrawal from Dangote Industries could have serious consequences for one of Africas largest industrial groups, as investors grow increasingly uneasy about its financial health.

This comes as Dangote Industries is currently dealing with $2 billion in syndicated senior debt and $1.65 billion in intra-group loans that can be called in at any time.

In the meantime, following the kickoff premium motor spirit sales in September 2024, other petroleum products, and Dangote Industries, have pinned their growth hopes on the Lekki refinery, but the massive project has yet to reach full production capacity or generate the revenue needed to ease cash flow pressure.

Recall that barely four days ago, Vice President of Dangote Industries, Devakumar Edwin, confirmed that it is on its way to full production capacity of 650,000 barrels per day. According to him, the company is currently at 85 percent, which is 552,500 barrels of crude oil daily.

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