The Dangote Refinery is set to sell its remaining 12.7% stake in 2024 to manage its loan obligations, according to a recent Fitch Ratings report.
Fitch Ratings revealed that the Nigerian National Petroleum Company Limited (NNPCL) had initially planned to acquire a 20% stake in the refinery. However, the national oil company decided against exercising its option to purchase an additional 12.75% by June 2024, which could impact Dangote Refinery’s ability to meet its loan commitments.
In 2021, NNPC acquired a 7.25% stake in the refinery for $1 billion, with the option to buy the remaining 12.75% by mid-2024. NNPC has since opted not to pursue this option.
Fitch commented, “The group’s plan to sell a 12.75% stake in 2024 is intended to help service a significant syndicated loan due in August 2024. However, the timing of the sale and meeting the loan maturity is uncertain.”
Dangote Refinery clarified that the agreement with NNPC was for a 20% stake. Since NNPC failed to complete the payment by the agreed deadline and requested an extension, they now hold only 7.25%.
NNPC has since decided not to increase its investment in the refinery. Spokesperson Olufemi Soneye stated, “NNPC Limited regularly reviews its investment portfolio to align with strategic goals. The decision to limit equity participation to the paid amount was communicated to Dangote Refinery months ago.”
Former Nigerian Education Minister Oby Ezekwesili has called for an independent audit to investigate the reasons behind NNPC’s decision to cap its investment at 7.25% instead of the planned 20%. She urged President Bola Tinubu to commission an audit to provide transparency on the transaction.
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