Economy
Fitch Drops Seven Energy to ‘RD’
By Modupe Gbadeyanka
The Long-Term Issuer Default Rating of Nigeria-based Seven Energy International Limited has been downgraded to ‘RD’ from ‘C’ by Fitch Ratings.
This followed Seven Energy’s announcement that the 30-day grace period has expired for the cash interest payment the firm missed on its $300 million secured notes and $100 million notes due 2021.
It was gathered that the company could not meet the conditions for the interest capitalisation.
The expiration of the grace period was an event of default under the notes’ terms.
However, Seven Energy is holding talks with its creditors to agree a standstill on its debt service obligations.
The company is also discussing a comprehensive financial restructuring with its existing and potential lenders and investors.
According to Fitch, it simultaneously affirmed the wholly owned subsidiary Seven Energy Finance Limited’s $300 million 10.25 percent senior secured notes due 2021 at ‘C’ with an ‘RR6’ Recovery Rating.
All Seven Energy’s oil liftings from oil mining licences (OMLs) 4, 38 and 41 under the strategic alliance agreement (SAA) with the state-owned Nigerian Petroleum Development Company Limited (NPDC) have stopped since February 2016, as the Forcados oil pipeline and terminal remain shut due to the threat of militant attacks.
Earlier in 2017, Seven Energy announced that NPDC intends to terminate the SAA unless the company meets outstanding cash calls. Seven Energy has taken steps to preserve its contractual rights under the SAA, but there is a risk that this once key cash-generating asset will remain largely unavailable.
Near-term cash flows from the company’s gas business remain weak as sale volumes are volatile and the company’s major gas off-takers, Nigerian state-owned power stations, delay payments for consumed gas.
In April 2017, Seven Energy reported delays in finalisation and effectiveness of the World Bank partial risk guarantee (PRG), which is meant to compensate Seven Energy for up to $112 million of gas supply invoices to Calabar power station, its principal gas off-taker.
The company currently expects the PRG to be finalised soon, after approval from the Nigerian authorities is obtained and the PRG could be called 90 days after its finalisation. Finalisation of the PRG would be positive, but we do not expect it to materially improve the overall payment discipline for Seven Energy’s gas business.
Longer term, the natural gas business in Nigeria’s southeast is an important growth driver for Seven Energy, which is on track to ramp up gas sales to over 150 million cubic feet per day.
Following the completion of the power grid, local power stations including Calabar can now run at full capacity. On the other hand, power stations continue suffering from stretched liquidity and poor receivables collection, and are delaying their payments to the company.
Seven Energy’s midstream gas infrastructure assets are fully ring-fenced and serve as security for the company’s $385 million Accugas loan.
There is a risk that the Accugas lenders may decide to enforce the security on the gas assets, stripping the company of its presently main cash-generating asset and effectively forcing it into liquidation.
Seven Energy’s natural gas revenues are US-dollar pegged but are received in Naira. Nigerian companies, including Seven Energy, are facing difficulties exchanging Naira into US Dollars, which the company needs to service its US-dollar debt, at the official exchange rate.
To alleviate the problem, the company is currently negotiating with lenders to convert the Accugas facility into naira and extend its maturity. The naira convertibility issue negatively affects the company’s liquidity as long as Forcados remains shut, as the company receives little US dollar revenue from its other operations.
By Adedapo Adesanya
Central Securities Clearing System (CSCS) Plc kept the NASD Over-the-Counter (OTC) Securities Exchange in the green territory by 0.04 per cent on Friday, July 16.
The securities depository company added N2.50 to its share price to settle at N95.14 per unit from the preceding session’s N92.64 per unit.
However, FrieslandCampina Wamco Nigeria Plc slid during the session by N5.85 to N141.81 per share from N147.66 per share.
But when the bourse closed for the day, the market capitalisation increased by N1.08 billion to N2.593 trillion from N2.592 trillion, while the NASD Security Index (NSI) appreciated by 1.80 points to 4,320.67 points from 4,318.87 points.
During the session, the value of securities slid by 38.9 per cent to N63.5 million from N104.1 million, the volume of securities went down by 34.5 per cent to 1.2 million units from 4.8 million units, and the number of deals declined by 15.4 per cent to 33 deals from 39 deals.
Great Nigeria Insurance (GNI) Plc was the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 75.4 million units traded for N5.3 billion.
GNI Plc also ended the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units sold for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The bulls regained control of the Nigerian Exchange (NGX) Limited on Friday after surrendering power to the bears a day earlier as a result of mild selling pressure.
Yesterday, the Nigerian bourse rebounded by 0.54 per cent, mainly due to the gains recorded by First Holdco and others.
Data harvested by Business Post indicated that the industrial goods and energy sectors were flat, while the banking index chalked up 3.13 per cent. The insurance space expanded by 1.08 per cent, and the consumer goods counter rose by 0.21 per cent.
Consequently, the All-Share Index (ASI) went up by 1,316.52 points to 243,462.13 points from 242,145.61 points, and the market capitalisation grew by N850 billion to N157.057 trillion from N156.207 trillion.
The market breadth index was bullish during the last trading session of this week, printing 31 appreciating stocks and 23 depreciating stocks, representing strong investor sentiment.
First Holdco led the advancers’ log after it climbed 9.97 per cent to N95.95, Haldane McCall appreciated by 9.94 per cent to N3.65, LivingTrust Mortgage Bank soared by 9.73 per cent to N3.72, LASACO Assurance jumped by 5.26 per cent to N2.00, and Thomas Wyatt gained 5.10 per cent to quote at N3.09.
On the flip side, Red Star Express declined by 9.50 per cent to N20.00, Omatek slipped by 6.08 per cent to N1.70, C&I Leasing shrank by 5.93 per cent to N5.55, Jaiz Bank crashed by 5.03 per cent to N8.50, and Livestock Feed fell by 3.89 per cent to N8.65.
As for the activity chart, market participants bought and sold 685.9 million equities for N42.7 billion in 44,134 deals on Friday versus the 498.5 million equities worth N34.9 billion traded in 39,484 deals on Thursday, implying a rise in the trading volume, value, and number of deals by 37.59 per cent, 22.35 per cent, and 11.78 per cent, respectively.
Investors’ darling for the day was First Holdco, with a turnover of 225.9 billion units valued at N21.0 billion, Guinea Insurance sold 53.4 million units for N45.2 million, Zenith Bank traded 41.5 million units worth N4.7 billion, Access Holdings exchanged 29.1 million units valued at N720.6 million, and UBA exchanged 27.5 million units for N1.2 billion.
By Modupe Gbadeyanka
The Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON) has appealed to the Nigeria Customs Service (NCS) to deepen its sensitisation on the newly introduced Green Tax Surcharge Policy.
The chairman of APFFLON, Mr Akeem Ayobiojo, made this plea on behalf of his colleagues on Tuesday, July 14, 2026, at the Customs House in Abuja, during a stakeholders’ engagement with the agency.
He also called for improvements in the administration of Pre-Arrival Assessment Reports and Post Clearance Audit and the African Continental Free Trade Area (AfCFTA).
Mr Ayobiojo stated that freight forwarders were happy to work with the customs, commending the organisation for implementing Chapter 99, describing it as a major relief for manufacturers.
He, however, emphasised that a deeper understanding of the new tax was necessary for his members, saying more predictable procedures would reduce delays and unexpected costs for importers and freight forwarders.
In his remarks, the Comptroller-General of Customs, Mr Adewale Adeniyi, assured manufacturers, freight forwarders and other players in the nation’s trade sector that the NCS would continue to engage them on fiscal policies affecting their businesses, saying sustained dialogue remains key to resolving implementation challenges and improving the country’s trading environment.
He also promised them the service’s resolve to enhance and facilitate trade, acknowledging that, “Your feedback is important because it helps us understand what is happening in the field, and where necessary, we will take your concerns to the Federal Ministry of Finance and other relevant government institutions.”
Speaking about Authorised Economic Operator (AEO), Mr Adeniyi further explained that Nigeria would not lower the standards required under the Authorised Economic Operator Programme as the initiative is guided by global benchmarks established by the World Customs Organisation (WCO).
On her part, the Deputy Comptroller-General of Customs for Tariff and Trade, Ms Caroline Niagwan, clarified that electric vehicles can be imported without payment of duty only by holders of Import Duty Exemption Certificate (IDEC) issued by the Federal Ministry of Finance.
She also urged importers facing classification disputes to take advantage of the Advance Ruling system, noting, “Once an Advance Ruling is issued based on genuine documentation, importers have certainty on classification, valuation or origin before the goods arrive, thereby reducing unnecessary disputes during clearance.”
