Fitch<\/a>\u00a0is basing its allegation on the timely completion or lack thereof of the project, adding that only limited delays or cost overruns may be tolerated in the current rating.<\/span><\/p>\nFitch argues that Dangote Industries suffers from weak corporate governance.<\/span><\/p>\nIt says that the existence of a \u201ccomplex group structure with a large number of related-party transactions\u201d has \u201ca negative effect on operational and financial transparency.\u201d<\/span><\/p>\n\u201cWe also think it\u2019s a risk that Aliko Dangote, as CEO and main shareholder, has a lot of power over operations,\u201d it added.<\/span><\/p>\nDangote had promised to commission the $19 billion refinery project before President Muhammadu Buhari\u2019s tenure ends next year.<\/span><\/p>\nNot only is the Dangote refinery very dear to Buhari\u2019s government, Fitch claims that the government sees the project as the messiah that will solve Nigeria\u2019s perennial fuel scarcity problem as it will end the country\u2019s dependence on imported foreign fuel.<\/span><\/p>\nBut as it turns out, Fitch seems to think that this dream and the time line Dangote gave Buhari is not achievable.<\/span><\/p>\nAnd their reason is not far fetched: Dangote requires an additional $1.1 billion (900 billion) naira to complete the refinery next year.<\/span><\/p>\nUnfortunately, Dangote does not have that kind of money now as he has invested all his cash and even borrowed from lenders to finance the refinery project.<\/span><\/p>\nAgain, the lenders that borrowed Dangote\u2019s loan for the financing of the project cannot give him the 900 billion naira that Dangote needs to complete the project as they are already over exposed to the project.<\/span><\/p>\nSo the only way Dangote can raise money is through the sale of bonds by his cement company, Dangote Cement.<\/span><\/p>\nDangote cement is already to sell bonds this year.<\/span><\/p>\nIf the money urgently needed by Dangote isn\u2019t raised through the sale of bonds, he can sell some shares in his cement company (he owns over 86% of Dangote cement) or he can sell some refinery project stakes, which would be the likely option to plug the gap.<\/span><\/p>\nHe has sold 20% of the refinery stake to NNPC at a cost of $2.5 billion, but he might be forced to dilute more stakes in the refinery if all the options to raise the $1.1 billion needed to complete the refinery fail him.<\/span><\/p>\nBut if all these measures to raise money fail to see the light of the day, the only available option left for Aliko is to increase the price of his cement from what it is now to something higher.<\/span><\/p>\nFitch concluded its report by saying that the earliest Dangote refinery can deliver its project is 2024 and not the 2023 that Dangote promised Buhari.<\/span><\/p>\nThe Dangote refinery project has gone too far and\u00a0 Dangote, is racing against time just to make sure that he delivers the project.<\/span><\/p>\nIf not for anything, a lot of hopes are tied to the project, and its failure to deliver will be nothing but a catastrophe.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"Fitch, the world\u2019s biggest global rating agency has alleged that Africa\u2019s wealthiest man, Aliko Dangote is broke. It alleged that his company, Dangote Industries has limited financial flexibility with which to complete its refinery. Fitch\u00a0is basing its allegation on the timely completion or lack thereof of the project, adding that only limited delays or cost […]<\/p>\n","protected":false},"author":1,"featured_media":8096,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2456],"tags":[2137,4809,4810],"class_list":["post-8095","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-aliko-dangote","tag-fitch","tag-global-rating-agency"],"_links":{"self":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts\/8095"}],"collection":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8095"}],"version-history":[{"count":1,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts\/8095\/revisions"}],"predecessor-version":[{"id":8097,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/posts\/8095\/revisions\/8097"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=\/wp\/v2\/media\/8096"}],"wp:attachment":[{"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8095"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8095"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theblogonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8095"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}