Economy
Fitch Upgrades Nigeria’s Seven Energy to ‘CC’
By Dipo Olowookere
Fitch Ratings has upgraded Nigeria-based Seven Energy International Limited’s Long-Term Issuer Default Rating to ‘CC’ from ‘RD’ (Restricted Default) following completion of the consent solicitation for the company’s 10.25% USD300 million senior secured notes due 2021.
Simultaneously, Fitch has affirmed wholly owned subsidiary Seven Energy Finance Limited’s $300 million senior secured notes at ‘C’ with a ‘RR6’ Recovery Rating.
Following the completion of Distressed Debt Exchange (DDE) in December 2016, Seven Energy may choose to pay interest on the notes in kind for up to four coupon payments between 11 October 2016 and 11 April 2018, subject to certain conditions.
However, its short-term liquidity remains extremely weak due to accumulated accounts receivables for sold natural gas, a limited ability to convert naira into dollars, and the ongoing Forcados export pipeline closure since February 2016.
Management has taken steps to improve the company’s liquidity, but we believe the current debt structure may be unsustainable and a default of some kind is probable.
All Seven Energy’s oil liftings from OMLs 4, 38 and 41 under the strategic alliance agreement (SAA) with the state-owned NPDC have stopped since February 2016, as the Forcados oil pipeline and terminal remain shut due to the threat of militant attacks. Management has given no estimate on when Forcados will be restarted.
As an alternative option, the company is considering barging oil via the inland Warri refinery. This option has not yet been tested by Seven Energy and we believe projected barging volumes would not compensate for the loss of the Forcados pipeline volumes.
On February 7, 2017, Seven Energy announced that Nigerian Petroleum Development Company Limited (NPDC) may terminate the SAA after 17 March 2017 unless the company meets outstanding cash calls.
Fitch said it understands from Seven Energy that it plans to challenge this potential action to preserve its contractual rights under the SAA. This may further worsen the company’s liquidity position and affect its operational profile; however, these risks are captured in the ‘CC’ rating.
Developing Natural Gas Business: The natural gas business in Nigeria’s southeast is an important growth driver for the company. It is now on track to ramp up gas sales to 150MMcfpd and more. The construction of the power grid to allow local power stations to run at full capacity has been completed and the Calabar power station (NIPP), one of the major off-takers, is able to generate additional electricity.
Uncertain Cash Flows from Gas: Near-term cash flows from the gas business are uncertain as sale volumes remain volatile and the company’s major gas off-takers, state-owned power stations, delay payments for consumed gas.
In November 2016, Seven Energy agreed a $112 million partial payment guarantee with Nigeria’s federal government for gas supply to the Calabar power plant and other customers; however, the guarantee is still unavailable pending finalisation of ancillary documentation.
Seven Energy’s midstream gas infrastructure assets are fully ring-fenced and serve as security for the company’s Accugas IV loan. There is a risk that the Accugas IV lenders may decide to enforce the security, stripping the company of its main cash-generating asset and effectively forcing it into liquidation.
Naira Convertibility Issues: Seven Energy’s natural gas revenues are US-dollar pegged but are received in naira. Nigerian companies are facing difficulties exchanging naira into US dollars, which Seven Energy needs to service its US-dollar debt, at the official exchange rate. To alleviate the problem, the company is working to convert the Accugas IV facility into naira. The foreign currency conversion issue negatively affects the company’s liquidity as long as Forcados remains shut, as the company receives little US dollar revenues from other operations.
By Adedapo Adesanya
The Senate Committee on Banking, Insurance and Other Financial Institutions has called for stronger collaboration among financial sector regulators and other stakeholders to strengthen Nigeria’s financial system and support sustainable economic growth.
The committee made the call during an expanded stakeholders’ engagement in Lagos, attended by the leadership of the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), Asset Management Corporation of Nigeria (AMCON), National Insurance Commission (NAICOM) and Nigeria Export-Import Bank (NEXIM), among other industry stakeholders and financial experts.
Chairman of the committee, Mr Adetokunbo Abiru (Lagos East), who was represented by Mr Osita Izunaso (Imo West), said stronger legislative reforms and regulatory collaboration were necessary to reposition Nigeria’s financial architecture for long-term economic prosperity.
Mr Abiru said the financial sector remained critical to investment, job creation, business expansion and macroeconomic stability, stressing that its ability to mobilise savings, channel credit to productive sectors, facilitate investment and manage risks was fundamental to sustainable economic growth.
He said the current economic realities required closer collaboration between the legislature and financial regulators, noting that challenges confronting the sector were interconnected and could not be effectively addressed through isolated interventions.
The lawmaker identified inflationary pressures, global economic uncertainties, cybersecurity threats, low insurance penetration and the need to diversify Nigeria’s export base as some of the challenges requiring coordinated policy responses.
He said the engagement was aimed at generating practical solutions to strengthen the country’s financial architecture and support sustainable economic growth.
According to him, monetary policy, financial safety nets, banking institutions, the insurance industry and export finance were interdependent components of a stable financial system and must therefore be strengthened collectively.
The Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mr Olusegun Ayo Omosehin, said the Nigeria Insurance Industry Reform Act (NIIRA) 2025 had contributed significantly to stabilising and repositioning the insurance sector.
Mr Omosehin disclosed that 43 insurance companies had successfully recapitalised, describing the development as a major milestone for the industry.
He commended Abiru and members of the committee for their role in advancing insurance sector reforms and urged the House of Representatives to expedite action on the relevant insurance reform bill to enable it to receive presidential assent and become operational.
Representatives of the CBN Governor and the Managing Directors of AMCON, NEXIM and NDIC also commended the Senate committee for its oversight and legislative support, saying its interventions had strengthened the agencies’ capacity to discharge their statutory mandates.
The engagement, held under the theme, Strengthening Financial System Architecture for Sustainable Economic Growth and Stability in Nigeria, also featured presentations by Professor Uche Uwaleke, President of Capital Market Academics of Nigeria (CMAN); Professor Biodun Adedipe, Chief Consultant, B. Adedipe Associates Limited; and Dr Tilewa Adebajo, Chief Executive Officer of CFG Advisory.
The experts presented policy recommendations on key issues affecting Nigeria’s financial system, with emphasis on financial stability, investment and sustainable economic growth.
Mr Abiru said the Senate would continue to engage financial regulators and other stakeholders to deepen financial inclusion, strengthen public confidence in financial institutions and improve regulatory effectiveness.
He said the broader objective was to position Nigeria’s financial system to compete more effectively in the global economy while remaining resilient and responsive to the country’s economic transformation agenda.
By Aduragbemi Omiyale
The first six months of 2026 were not too good for Caverton Offshore Support Group Plc, as it suffered an N8.7 billion loss compared with the N2.1 billion net profit it recorded in the same period of 2025.
This occurred as the company posted a 10.91 per cent decline in earnings between January and June 2026, according to its financial statements for the period ended June 30, 2026.
Analysis of the results showed that the revenue generated in the period under review stood at N14.7 billion versus the N16.5 billion printed in the corresponding period of last year.
Business Post observed that the revenue was negatively impacted by a decline in earnings from helicopter charter and helicopter/airplane contract.
Further analysis of the financial results indicated that operating profit went down by 22.34 per cent to N7.3 billion from N9.4 billion, with administrative expenses jumping to N7.9 billion from N4.7 billion.
But Caverton believes things will get better, noting that the clearest driver of the recovery is Caverton Marine.
Through its relationship with Stena Bulk, one of the world’s leading tanker operators, the organisation now participates in three Suezmax tankers trading a rare source of foreign-currency revenue for a Nigerian-listed company.
It noted that the relationship is being deepened through Unity Shipping Worldwide, a joint venture with the Nigerian National Petroleum Company (NNPC) Limited and Stena Bulk that pairs the state-owned oil firm’s national position and Stena Bulk’s fleet with Caverton’s indigenous operating platform
Closer to home, the firm’s OMIBUS platform, developed with Shanghai-based electric-propulsion OEM Explomar, is bringing battery-electric passenger ferries to Lagos waterways. A prototype is already in service, and Caverton holds a firm order from Lagos State for ten vessels, an early-mover position in clean inland-water transport that the group believes can be replicated across other states as the fleet enters service and ferry operations mature into steady, recurring revenue.
In aviation, the institution said the recovery is anchored on its partnership with NHV, a Belgium-based international helicopter operator, with the restructuring of charter operations targeted for the second half of 2026.
“The first half of the year tested us, but the direction of travel is now visible in the numbers.
“Quarter on quarter, we are working to build up our revenue to narrow losses. Our marine business units, from international tankers to electric ferries, are scaling.
“Meanwhile, our aviation relaunch is on track for the second half, and our cost base is tighter than it has been in years. There is distance still to travel, but Caverton is moving from stabilisation to recovery, and we intend to finish 2026 with that momentum intact,” the chief executive of Caverton, Mr Olabode Makanjuola, stated.
By Adedapo Adesanya
The Nigeria Revenue Service (NRS) and the Joint Revenue Board (JRB) have issued new guidelines clarifying the taxation of virtual assets in Nigeria.
The guidelines provide an administrative framework for the taxation of virtual assets and specify the tax obligations of individuals and businesses operating in the sector.
According to a public notice issued by the two agencies, the framework covers registration, reporting and record-keeping requirements, valuation principles and the tax treatment of virtual asset transactions.
It applies to taxpayers, Virtual Asset Service Providers (VASPs), peer-to-peer (P2P) marketplace operators, tax practitioners and other persons engaged in virtual asset-related activities.
The NRS and JRB said the guidelines were developed in line with the provisions of the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025.
The two bodies said the release was aimed at providing clarity, certainty and consistency in the administration of Nigeria’s tax laws as the country’s virtual asset ecosystem continues to evolve.
The agencies added that the framework would promote voluntary compliance, enhance transparency and support the development of a fair and efficient tax system for digital asset transactions.
They urged all affected taxpayers and stakeholders to familiarise themselves with the guidelines and ensure compliance with the applicable tax obligations.
The guidelines are available on the official websites of the two agencies.
