Dangote Cement, Africa’s largest cement producer, on Thursday informed the Nigerian Stock Exchange (NSE) about the publication of stable outlook ratings by Moody’s and Global Credit Ratings.
These ratings may be a first step towards addressing its free-float deficiency, ahead of the 2018 deadline given by the NSE, for it to sell down the majority 91.97% held by its Dangote Industries Limited and its President and Chief Executive, Alhaji Aliko Dangote. Of the company’s 17.04bn ordinary shares of 50 kobo, only 9.03% is held in the hands of the public.
Free-float is the percentage of a company’s shares outstanding available in the hands of investors other than its majority shareholders and insiders, including company management and staff.
Moody’s Investors Service, according to the statement dated Wednesday, July 5, 2017, assigned a first-time Ba3 Local Currency Corporate Family Rating, Ba3-PD Probability of Default Rating and Aaa.ng National Scale Rating, with a stable outlook rating.
Meanwhile, Global Credit Ratings (GCR) assigned the company with multiple operational bases across Nigeria and Africa “long term and short term national scale issuer ratings of AA+(NG) and A1+(NG) respectively, also with stable outlook, with the ratings billed to expire in September 2017.
The statement by Carl Franklin, the company’s head of investor relations, quoted Moody’s Douglas Rowlings, Assistant Vice President and lead analyst for Dangote Cement at Moody’s as saying “Dangote Cement Plc’s Ba3 local currency corporate family rating, one-notch above the government of Nigeria’s own rating, reflects the company’s strong standalone credit profile and track record of demonstrated financial support from a larger and more diversified parent Dangote Industries Limited.”
The publication of these credit ratings, for “Dangote Cement, a high-growth, low-debt, internationally diversified company that has just paid a dividend amounting to nearly 75% of (its) 2016 net profit to shareholders,” Onne van der Weijde, its chief executive officer was quoted as saying, “highlights the financial strength we have achieved through our unwavering focus on the profitable expansion of the business.”
This, he continued, is “underpinned by our belief that we must remain prudent in our financial management.”
Market watchers believe, the ratings represent a first step towards the eventual listing of Dangote Cement on the London Stock Exchange, as part of making it available to international investors, given that Nigerian retail and institutional investors may not absorb the quantity to be offered.