Africa’s richest man who has sat in the position for more than three consecutive times, and the Chairman of Dangote Group of Companies, Aliko Dangote, may forfeit his refinery to the Federal Government as it is running into debts.
This is coming a few days after the Federal Government approved the acquisition of 20% minority stakes of Dangote Refinery and Petrochemical by the Nigerian National Petroleum Corporation(NNPC) for $2.76 billion. Recall that the NNPC had in May announced that it plans to purchase a stake in Africa’s biggest refinery, Dangote Refinery, to further help ensure an undisrupted supply of petroleum products across the country when the transaction pulls through.
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In a new report, however, SaharaReporters have it that Dangote refinery may soon run into a deep financial crisis as a result of a $7 billion debt burden it has. According to the media, the debt indicates a possible takeover of the project by the Assets Management Corporation of Nigeria (AMCON).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. This makes it the third time the completion date of the refinery has been moved.
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Presently, this debt burden has risen to $7 billion with debt servicing of almost $700 million per annum. “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”, the media said. “With these incessant delays, some financing banks are said to be 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”, the report added.TRENDING VIDEO: Top 13 Black Sports Women At The 2020 Olympics Photos Credit: Getty