NewStats: 3,261,414 , 8,173,920 topics. Date: Thursday, 29 May 2025 at 07:39 AM 4uf1b

Dangote May Forfeit Refinery Project To Nigerian Debt Recovery Agency Over Rising Debts, Long Delay

With the refinery now projected to commence operations in 2025, Dangote Group’s indebtedness to financial institutions is estimated to hit $8.4 billion by 2025.

Dangote Oil Refinery, which is reputed to be Africa’s biggest oil refinery, may soon run into a deep financial crisis as a result of a $7 billion debt burden – a situation which indicates a possible takeover of the project by the Assets Management Corporation of Nigeria (AMCON).

Dangote Refinery is an oil refinery owned by the Dangote Group that is under construction in Lekki, Nigeria.

Dangote Group is a Nigerian multinational industrial conglomerate, founded by Aliko Dangote, Africa's richest man.

The Group's interests span a range of sectors in Nigeria and across Africa.

According to an analysis by the Money Management Series, Dangote Oil Refinery, a 650,000-barrel per day (BPD) integrated refinery project under construction in the Lekki Free Zone, Lagos, Nigeria, was expected to commence production in 2016 with $3.3 billion financing secured in 2013.

With the refinery now projected to commence operations in 2025, Dangote Group’s indebtedness to financial institutions is estimated to hit $8.4 billion by 2025.

Presently, this debt burden has risen to $7 billion with debt servicing of almost $700 million per annum.


The completion date of the refinery has been moved eight times.

Whilst some might say this is not in the character for Dangote Industries and their numerous projects across different sectors, the problem is deeply rooted.

A contractor at the delayed refinery project, speaking under the condition of anonymity, said that poor planning, underpayment of contractors, and a lack of proper project management with over 40 contractors on site have led to most of the delays. He also added that of the 40, none is willing to commission as there is no clear delegation of duty and over-decentralisation leading to absolute chaos.

With these incessant delays, some financing banks are already calling in their loans amid fears of liquidity crisis, while others are elated by the guarantee of huge interests to be recouped as soon as the refinery comes on stream.

Dangote has been able to restructure the facilities from various local and international banks twice so far, but most banks have totally refused to restructure for the third time with principal repayment also falling due as well as the annual interest payments.

The Nigerian National Petroleum Corporation (NNPC) has made available $3.8 billion as part of federal government’s 20% equity in the project, providing $1 billion cash, while the remaining $2.8 billion will be in crude supply.

However, analysts have pointed out that NNPC’s 20% equity at $3.8 billion makes the Dangote refinery overvalued at $19 billion.

When Aliko Dangote unveiled early plans for the refinery in September 2013 and announced that he had secured about $3.3 billion in financing for the project, the refinery was estimated to cost about $9 billion, of which $3 billion would be invested by the Dangote Group and the remainder via commercial loans, and begin production in 2016.


However, after a change in location to Lekki, construction of the refinery did not begin until 2016 with excavation and infrastructure preparation, and the planned completion was pushed back to late 2018.

In July 2017, major structural construction began, and Dangote estimated that the refinery would be mechanically complete in late 2019 and commissioned in early 2020. Experts, however, posit that the construction would likely take at least twice as long as Dangote publicly stated, with refining capability not likely to be achieved until 2025.

Meanwhile, last week the Minister of State for Petroleum Resources, Timipre Sylva, reiterated that Federal Executive Council (FEC) approved the acquisition of 20 per cent minority stakes by the NNPC in the Dangote Petroleum and Petro-Chemical Refinery.

Sylva, while briefing State House correspondents after the virtual FEC meeting presided by Vice President Yemi Osinbajo last Wednesday at the Presidential Villa, said the acquisition was in the sum of $2.76 billion.

“The Executive Council also approved the acquisition of 20 percent minority stakes by the NNPC in the Dangote Petroleum and Petro-Chemical Refineries in the sum of $2.76 billion,” he said.

This development has been described by industry observers as strange because $2.76 billion falls short of 20 percent of the Dangote project valued by the sponsor at $16 billion. Using the $16 billion value, 20 percent should be $3.2 billion and analysts have expressed dissatisfaction at the disparity in the project’s value and NNPC’s funding.

Speaking with MMS Plus on the complexities with funding Dangote refinery, the Managing Director of Cowry Assets Management, Mr. Johnson Chukwu, argued that the banks wouldn’t have any challenge from the financing because Dangote would have to pay the interests.

“I don’t see the banks being unable to meet their liquidity because of the monies tied down in the Dangote refinery. Ultimately, if the investment is economically viable, when it starts operation it should be able to meet up the arrears. I believe the banks that went into this project understood some of these constraints and didn’t break their balance-sheets in the move to finance Dangote refinery. I don’t envisage any bank having a liquidity challenge as a result of investing in Dangote refinery. If there is any challenge it would come from Dangote, but it should be resolved when the project takes off,” he said.

Commenting on the possibility that NNPC over-valued or under-valued the project in its 20% equity, Chukwu opined that NNPC may be looking at an enterprise valuation while the other value could be the net value.

“The enterprise value could be higher than the amount Dangote has invested in the project. However, I wasn’t involved in determining that, so anything I say will be purely speculative,” he said.

Despite the massive of the Nigerian government on the refinery project, things have got so bad for the billionaire that even income from his other businesses may not be enough to cover the interest rates, let alone the principal.

The $8.4 billion debt represents 75% of Dangote’s net worth at $11.1 billion and Africa’s richest man has to seek innovative ways to prop up his business now as the refinery project continues to be consistently delayed.

http://saharareporters.com/2021/08/10/africas-richest-man-dangote-may-forfeit-refinery-project-nigerian-debt-recovery-agency

Tell us another cock and bull story. This terrorist Fulani led federal government will rather empty Nigeria's vault than to see Dangote encounter financial problem

Seems, his personal assets is different from business because I don't understand how Africa's richest man would incur such huge debt

Nor be only him go dey eat na!

As much as I don’t like Dangote because of his monopolistic tendencies in whatever sector he ventures into, I wouldn’t wish a govt takeover of the refinery.

Sometimes we have to enthrone reason over whatever primordial sentiments we might harbour.

If AMCON takes over the refinery, what’s the guarantee it won’t become just another Warri, Port Harcourt and Kaduna refinery?

Or become like Ajeokuta Steel plant?

Since AMCON took over Keystone, Enterprise, Heritage and one other banks, I don’t think those banks have been anything close to what they used to be.

But why will start of production at the refinery be pushed to 2025 for a refinery touted to be above 80% completed and is projected to start production by first quarter of 2022?

I doubt the veracity of this new claim abeg.

Diversionary tactics! Abi dangote will purchase NNPC on credit and the Nigerian government won’t do shitt!!

That's why in every businesses, there are risk which beyond theoretical explanation until you get to the field and reality begin to unfold.

For Instance in 2013; it was projected that the Refinery will commence operation by 2016 meanwhile the construction didn't commenced until 2018. All the issues itemized in the report didn't make the project a bad market, only that the production didn't come to fruition on time as planned due to factors beyond their control and the credit facilities are running out of time.

In all, everything will be sorted out. Business is not for the faint hearted fellows.

Ibeju-Lekki is so promising and remain hottest Investment zone, so I will encourage all investors home and abroad to key into opportunities in that axis.

Come in person for physical Inspection or send someone you can confide in to come and visit our Estates within and around Ibeju-Lekki, where you can truly have value for your investment.

I'm a Realtor.

Amen

God bless Sony interactive entertainment ;God bless the United States ;God bless Nigeria ;God bless Kogi state; God bless the good people of Okene

WTF?
Hope he finds a way around it. $8.4bn debt no be beans.

R

dengote Monopoly king of Nigeria

He follow colet money from hush ni...

dre11:
Dangote May Forfeit Refinery Project To Nigerian Debt Recovery Agency Over Rising Debts, Long Delay

With the refinery now projected to commence operations in 2025, Dangote Group’s indebtedness to financial institutions is estimated to hit $8.4 billion by 2025.

Dangote Oil Refinery, which is reputed to be Africa’s biggest oil refinery, may soon run into a deep financial crisis as a result of a $7 billion debt burden – a situation which indicates a possible takeover of the project by the Assets Management Corporation of Nigeria (AMCON).

Dangote Refinery is an oil refinery owned by the Dangote Group that is under construction in Lekki, Nigeria.

Dangote Group is a Nigerian multinational industrial conglomerate, founded by Aliko Dangote, Africa's richest man.

The Group's interests span a range of sectors in Nigeria and across Africa.

According to an analysis by the Money Management Series, Dangote Oil Refinery, a 650,000-barrel per day (BPD) integrated refinery project under construction in the Lekki Free Zone, Lagos, Nigeria, was expected to commence production in 2016 with $3.3 billion financing secured in 2013.

With the refinery now projected to commence operations in 2025, Dangote Group’s indebtedness to financial institutions is estimated to hit $8.4 billion by 2025.

Presently, this debt burden has risen to $7 billion with debt servicing of almost $700 million per annum.


The completion date of the refinery has been moved eight times.

Whilst some might say this is not in the character for Dangote Industries and their numerous projects across different sectors, the problem is deeply rooted.

A contractor at the delayed refinery project, speaking under the condition of anonymity, said that poor planning, underpayment of contractors, and a lack of proper project management with over 40 contractors on site have led to most of the delays. He also added that of the 40, none is willing to commission as there is no clear delegation of duty and over-decentralisation leading to absolute chaos.

With these incessant delays, some financing banks are already calling in their loans amid fears of liquidity crisis, while others are elated by the guarantee of huge interests to be recouped as soon as the refinery comes on stream.

Dangote has been able to restructure the facilities from various local and international banks twice so far, but most banks have totally refused to restructure for the third time with principal repayment also falling due as well as the annual interest payments.

The Nigerian National Petroleum Corporation (NNPC) has made available $3.8 billion as part of federal government’s 20% equity in the project, providing $1 billion cash, while the remaining $2.8 billion will be in crude supply.

However, analysts have pointed out that NNPC’s 20% equity at $3.8 billion makes the Dangote refinery overvalued at $19 billion.

When Aliko Dangote unveiled early plans for the refinery in September 2013 and announced that he had secured about $3.3 billion in financing for the project, the refinery was estimated to cost about $9 billion, of which $3 billion would be invested by the Dangote Group and the remainder via commercial loans, and begin production in 2016.


However, after a change in location to Lekki, construction of the refinery did not begin until 2016 with excavation and infrastructure preparation, and the planned completion was pushed back to late 2018.

In July 2017, major structural construction began, and Dangote estimated that the refinery would be mechanically complete in late 2019 and commissioned in early 2020. Experts, however, posit that the construction would likely take at least twice as long as Dangote publicly stated, with refining capability not likely to be achieved until 2025.

Meanwhile, last week the Minister of State for Petroleum Resources, Timipre Sylva, reiterated that Federal Executive Council (FEC) approved the acquisition of 20 per cent minority stakes by the NNPC in the Dangote Petroleum and Petro-Chemical Refinery.

Sylva, while briefing State House correspondents after the virtual FEC meeting presided by Vice President Yemi Osinbajo last Wednesday at the Presidential Villa, said the acquisition was in the sum of $2.76 billion.

“The Executive Council also approved the acquisition of 20 percent minority stakes by the NNPC in the Dangote Petroleum and Petro-Chemical Refineries in the sum of $2.76 billion,” he said.

This development has been described by industry observers as strange because $2.76 billion falls short of 20 percent of the Dangote project valued by the sponsor at $16 billion. Using the $16 billion value, 20 percent should be $3.2 billion and analysts have expressed dissatisfaction at the disparity in the project’s value and NNPC’s funding.

Speaking with MMS Plus on the complexities with funding Dangote refinery, the Managing Director of Cowry Assets Management, Mr. Johnson Chukwu, argued that the banks wouldn’t have any challenge from the financing because Dangote would have to pay the interests.

“I don’t see the banks being unable to meet their liquidity because of the monies tied down in the Dangote refinery. Ultimately, if the investment is economically viable, when it starts operation it should be able to meet up the arrears. I believe the banks that went into this project understood some of these constraints and didn’t break their balance-sheets in the move to finance Dangote refinery. I don’t envisage any bank having a liquidity challenge as a result of investing in Dangote refinery. If there is any challenge it would come from Dangote, but it should be resolved when the project takes off,” he said.

Commenting on the possibility that NNPC over-valued or under-valued the project in its 20% equity, Chukwu opined that NNPC may be looking at an enterprise valuation while the other value could be the net value.

“The enterprise value could be higher than the amount Dangote has invested in the project. However, I wasn’t involved in determining that, so anything I say will be purely speculative,” he said.

Despite the massive of the Nigerian government on the refinery project, things have got so bad for the billionaire that even income from his other businesses may not be enough to cover the interest rates, let alone the principal.

The $8.4 billion debt represents 75% of Dangote’s net worth at $11.1 billion and Africa’s richest man has to seek innovative ways to prop up his business now as the refinery project continues to be consistently delayed.

http://saharareporters.com/2021/08/10/africas-richest-man-dangote-may-forfeit-refinery-project-nigerian-debt-recovery-agency

Thank You Jesus

Not happening. Fake news. Dont get me wrong; I would dearly love this to happen. But the capitalist that Dangote is, I don't see how he would ever allow this to happen.

They have started

Nigerians don't fall for their gimmicks
This is just a ploy to let us know what is to come...we shouldn't be suprised when we start buying fuel at the rate of #1,000 per litre when the refinery is completed

Dangote can't do that. Lori ilo

All na lie.......That man doesn’t care about the country!!!

Akụkọ Mike Ejeagha

Hehe

He is a Buhari er, e no concern me

Kukuma tell us it's a Nigerian project secretly handled by Dangote

Nah eh! No qualms
This is so unsophisticated

Project I started hearing about
Since a decade now

How can a whole richest man in Africa be owing such debt?

Is there something they are not telling us?

Petroleum product importation continues by cabals.....

Seems every refinery project in our dear country is doomed. I hope this doesn't signify the beginning of an end to Dangotes business empire.

Just a thought.

So Dangote is a debtor!?

God I thank you say no be only me.

Am a business man is very bad may God help me

Failed country

The Buhari effect.

Kelblaq:
Amen

Hmmmm