Contrary to some reports that the Assets Management Corporation of Nigeria (AMCON) could take over the Dangote Refinery over debts owed by the Dangote Group to banks, the corporation has denied such claims saying it has no business with the group.
Some online news platforms had yesterday reported that Africa’s richest man, Aliko Dangote, could forfeit the Dangote Refinery over a $7 billion debt burden owed to commercial banks in the country with a possible takeover by AMCON.
AMCON however denied such plans. It said neither Dangote Refinery nor the Dangote Group is on its debtors’ list and so could not warrant its taking over of the assets.
Head of Corporate Communications at AMCON, Jude Nwauzor, disclosed that since the Dangote Group is not on its debtors list, the rumour that it was planning to take over the assets of Dangote Refinery was false.
Multiple sources in the Dangote Group also said the report was “false and malicious”, as the group has the capacity to service and pay its debt.
AMCON had in 2010 purchased 12,743 bad loans worth N3.8 trillion from 22 Eligible Financial Institutions (EFIs) for a purchase price of N1.8 trillion. According to AMCON, Dangote Refinery was not part of the bad debts that it took over and there was no way it would be taking over the assets of the company now.
The Federal Executive Council (FEC) had recently approved the acquisition of 20 per cent minority stake by the Nigerian National Petroleum Corporation (NNPC) in the Dangote Petroleum and Petrochemical Refinery.
The Dangote Oil Refinery, is a 650,000-barrel per day (BPD) integrated refinery project under construction in the Lekki Free Zone, Lagos, Nigeria.
Commenting on the rumoured indebtedness of Dangote Group, an energy finance expert, Dan Kunle, noted that there is nowhere in the world where such projects are done without debt.
According to him, the private sector of any economy is developed through access to loans and a huge project such as the Dangote Refinery is not an exception.
Kunle while noting that the Dangote Refinery project is one of the best things to happen to the country, stressed the need for Nigerians to be optimistic about the project.
He said, “I don’t know why some people are negatively fixated on this project. For those of us that are optimistic about it, we believe that the project will be completed and it will be beneficial to the whole country.”
Meanwhile, the head of Financial Institutions at Agusto & Co, Ayokunle Olubunmi, has said while the level of loan should be of concern, it is not enough to create apprehension.
“I think it is something that the industry should be concerned about but in my opinion, it is going to be resolved. Although we have not had a syndicated loan this big that had challenges. In the past we have seen syndicated loan that there were issues but were resolved.
“Remember that this is a strategic national asset that is not just for Dangote. The whole nation is waiting for the completion of this project. In the long run, it might take a while and might be challenging but it will be resolved. We also need to bear in mind, Dangote has other businesses that he gets dividend from even though those businesses may not be enough to pay off the loan, but it is something that can actually be looked at.
“It is not a normal loan that we can say this person is defaulting with delays and all. Moreover since the CBN and the federal government are all interested in resolving it, I think there is going to be a way around it.”