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Nigerian Banks have been forced to restructure a stressed syndicated loan, extended to Dangote Industries Limited (DIL) to finance its 650,000 barrels a day refinery project.
The creditor banks have since provided principal moratorium and other remedial measures, according to GCR Ratings in a report.
There has been a significant jump in the Dangote group’s gross debt to N15 trillion as of September 2025, up from N6.9 trillion in 2023, which has constrained its leverage metrics within weak levels.
The growth in the debt level followed additional working capital loans drawn to support crude feedstock for the refinery and operations across subsidiaries, as well as the adverse effect of the devaluation of naira on its foreign currency denominated facilities of over 80% of total debt.
DIL may struggle to get debt financing for the planned expansion of its refinery to 1.4 million barrels per day (bpd) as further debt capacity may be limited by covenant restrictions and negative pledges on its existing facilities.
DIL downgraded
GCR Ratings (GCR) also downgraded Dangote Industries Limited’s national scale long-term and short-term issuer ratings to A+(NG) and A1(NG), respectively, from AA+(NG) and A1+(NG) previously.
Concurrently, GCR has downgraded the national scale long-term issue rating accorded to each of Dangote Industries Funding Plc Series 1 Tranche A and Tranche B Bonds as well as the Series 2 Bond to A+(NG) from AA+(NG) previously.
The outlook on the ratings has been revised to Evolving from Rating Watch Negative.
“The downgrade of Dangote Industries Limited’s (DIL) ratings reflects the spike in short-term debt following the ramp up of operations at the refinery as well as the lingering impact of adverse exchange rate movements on the loan book in financial years 2023 and 2024,” GCR said.
“As such, overall leverage and capital structure remain constrained despite improvements during 9M 2025 with potential for further improvements over the medium term.”
Similarly, interest coverage remains weak due to the higher debt level.
The ratings were also affected by ongoing inconsistencies in unaudited consolidated financial reporting, particularly in the presentation and movement within the statement of cash flows.
The Series 1 (Tranches A and B) and Series 2 Senior Unsecured Bonds (cumulative NGN300Bn) were issued in 2022 by Dangote Industries Funding Plc, a sponsored special purpose vehicle.
Being senior unsecured debt sponsored by DIL, the Series 1 Tranches A and B Bonds and the Series 2 Bond rank pari passu with all other senior unsecured creditors of the group.
Therefore, the Bonds bear the same national scale long-term rating and outlook as accorded to DIL and any change in DIL’s long-term corporate rating would impact the Bonds ratings.
DIL Revenue Hits N11.6trn in H1, EBITDA margins improve
The Dangote Group’s revenue size hit N11.6 trillion as of June 2025 (H1) and is forecast to peak at a new high of N23 trillion by the end of financial year 2025.
Given the typically slow earnings during the commencement phase of the Refinery, net debt to EBITDA weakened to 13x in 2024, but significantly strengthened to 4.6x in H1 2025 following improved earnings, while operating cash flows remained negative due to elevated working capital and finance cost pressures.
Earnings however showed strong recovery prospects, following the ramp up of operations at the refinery, underpinning a better EBITDA margin of 12% in H1 2025 after the compression to a review period low of 6.8% in 2024 during the commencement phase.
Prior to 2024, the group’s reported strong margins were bolstered by the cement and fertilizer segments, delivering above-peer profitability.
With the integration of refining earnings, group margins now reflect normalised levels in line with the dynamics of oil refining, which now accounts for over 70% of the group’s turnover.
“We expect further margin expansion over the next 18 months as refining capacity utilization continues to rise. Additionally, steady margin enhancement is expected from the cement and fertilizer business segments (jointly accounting for 54% of group EBITDA), driven by their inherently strong margins, operational efficiencies and pricing power in key markets,” GCR said.
Dangote Group’s business interests span oil and gas refining, cement, salt and sugar refining, fertilizer production and other operations in the primary manufacturing and logistics sectors.
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