Fitch Ratings Suspends Monitoring of Dangote Industries Amid Refinancing Challenges

Fitch Ratings, a global credit rating agency, has halted its assessment of Dangote Industries, citing commercial reasons. This decision follows the agency’s earlier placement of the Nigerian conglomerate on “Rating Watch Negative” due to difficulties in refinancing its debt.

Operating in sectors such as cement, oil refining, and fertilizers, Dangote Industries faces mounting pressure to restructure its debt and secure significant liquidity. The ongoing refinancing of maturing debt remains unresolved, raising concerns about the company’s ability to meet its financial obligations.

While Fitch’s withdrawal does not indicate a default, it casts doubt on Dangote’s capacity to obtain favorable refinancing terms. Without a credit rating, the company may encounter higher borrowing costs and reduced access to international funding, potentially straining its financial position further.

In response, Dangote Industries is reportedly in advanced discussions with creditors to extend debt maturities and negotiate improved refinancing conditions. Success in these efforts could stabilize cash flow and restore market confidence.

Despite Fitch’s exit, other rating agencies like Moody’s and S&P Global Ratings are expected to continue evaluating Dangote Industries. Financial analysts warn that Fitch’s departure could have significant implications for one of Africa’s largest industrial groups, especially as the company manages $2 billion in syndicated senior debt and $1.65 billion in intra-group loans subject to immediate recall.

The company’s growth strategy heavily relies on the Lekki refinery, which commenced premium motor spirit sales in September 2024. However, the refinery has yet to achieve full production capacity or generate sufficient revenue to alleviate cash flow pressures. Recently, Devakumar Edwin, Vice President of Dangote Industries, announced that the refinery is operating at 85% capacity, processing 552,500 barrels of crude oil daily, with plans to reach full capacity of 650,000 barrels per day.