Economy
We’ve Ended Our Contract With Fitch—Dangote
By Adedapo Adesanya
Dangote Group has confirmed that it has officially ended contract with Fitch Ratings for the company’s credit assessment.
Reacting to Fitch Ratings withdrawal report, Mr Anthony Chiejiena, the head of the group’s corporate communications officer, said the organisation decided not to renew its contract with the agency after expiration.
“We ended our contract with Fitch Ratings, we did not renew it,” he said in a communication to the development.
Last week, Fitch Ratings announced withdrawal of Dangote Industries Limited’s (Dangote) National Long-Term Rating and senior unsecured rating of ‘B+ (nga)’.
However, the global rating agency said it is maintaining them on Rating Watch Negative (RWN), which reflect uncertainty related to the group’s ability to refinance maturing debt.
According to Fitch, the rating watch negative it recently accorded the group was not resolved due to the pending refinancing of the company’s maturing debt.
“Fitch will no longer provide ratings or analytical coverage for Dangote and has withdrawn them for commercial reasons,” the agency said.
In 2024, Fitch Ratings came hard on Dangote Industries Limited, emphasizing the group huge financial leverage.
In August, Fitch downgraded Dangote Industries Limited National Long-Term Rating to ‘B+(nga)’ from ‘AA(nga)’ and senior unsecured debt rating issued by Dangote Industries Funding Plc to ‘B+(nga)’ from ‘AA(nga)’.
Fitch has simultaneously placed the ratings on Rating Watch Negative, reflecting significant deterioration in the group’s liquidity position following lower than expected disposal proceeds, operational and financial underperformance compared to prior expectations.
The global rating agency said assessment was also affected by local currency devaluation, and lack of contracted backup funding to repay its significant debt facilities maturing on 31 August 2024.
“We view the lack of DIL’s audited accounts for 2023 as a corporate governance issue”, Fitch said in August 2024.
