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Dangote Industries to Raise $750 million Bond to Help Finance Refinery Completion

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Dangote Industries Limited (DIL) is planning to establish a local bond programme amounting to USD750 million to partially finance the completion of its refinery and petrochemical plant.

Dangote Oil Refining Company Limited (DORC) and Dangote Fertiliser Limited (DFL), DIL’s subsidiaries, will be co-obligors under the proposed programme.

Fitch Ratings has assigned Dangote Industries Limited (DIL) a Nigerian National Long-Term Rating of ‘AA(nga)’ with a Stable Outlook.

DIL is a diversified conglomerate in Nigeria with a leading share in the cement business and a future key operator in the petrochemical industry through its fertiliser and oil refinery business.

Its strategy is to gradually establish a downstream industry in Nigeria and be the largest urea producer in Nigeria. It also aims to make Nigeria a net exporter of refined petroleum products and petrochemicals by 2026.

DIL’s refinery project is still on track to be completed by 2023, and requires additional USD1.1 billion capex in 2022 to be partly funded by the new bond, according to Fitch.

“Considering the importance of the refinery’s cash flow contribution to the company’s deleveraging capacity, the timely completion of the project is a key driver of our rating,” Fitch said.

The refinery project is expected to sustain strong margins and yield solid cash generation, adding diversification to DIL’s profile and allowing rapid deleveraging.

“Once operational, we expect this project to contribute around USD1 billion to EBITDA annually when ramped up from 2024,” Fitch said.

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