Ratings withdrawal: We ended contract with Fitch – Dangote

Dangote Group has revealed that it officially ended its contract with Fitch ratings for the company’s credit assessment. 

Reacting to Fitch Ratings withdrawal report, Anthony Chiejina, the head of the group’s corporate communication commented that, “We ended our contract with Fitch Ratings, we did not renew it”.

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 maintains them on Rating Watch Negative (RWN), which reflects uncertainty related to the group’s ability to refinance maturing debt.

According to Fitch, the rating watch negative that 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 “Fitch will no longer provide ratings or analytical coverage for Dangote and has withdrawn them for commercial reasons,” the agency said.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 a message over the weekend, Chiejina said, “We had ended our contract with Fitch…We did not renew it”.  In 2024, Fitch Ratings came hard on Dangote Industries Limited, emphasizing the group’s 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.