Dangote Refinery plans to sell a 12.7% stake in 2024 to service its loans, according to a report by Fitch Ratings, a credit rating agency.
Fitch recalled that the Nigerian National Petroleum Company Limited (NNPC) had previously planned to acquire a 20% stake in the refinery, but has since decided not to exercise its option to purchase an additional 12.75% stake as of June 2024.
This decision may impact the group’s ability to service its loans, Fitch noted. In 2021, NNPC acquired a 7.25% stake in the refinery for $1.0 billion, with an option to purchase the remaining 12.75% stake by June 2024.
However, NNPC has reneged on its decision, and the Dangote Group plans to divest a 12.75% stake in the refinery in 2024 to service its significant syndicated loan maturing in August 2024.
Fitch expressed uncertainty about the timely divestment and meeting the imminent maturity. In July, Alhaji Aliko Dangote, President of the Dangote Group, clarified that NNPC owns only a 7.2% stake in the refinery, not 20% as previously thought.
Dangote explained that the agreement was for 20%, but NNPC did not pay the balance, and the extension was not taken up.
NNPC confirmed this, stating that it decided not to invest further in the refinery after assessing its investment portfolio.
NNPC’s spokesperson, Olufemi Soneye, said the decision to cap its equity participation was made and communicated to Dangote Refinery several months ago.
