Nigerian ratings agency Agusto& Co has upgraded thecorporate credit ratings of oil and gas firm Axxela Limited from “Bbb” to “Bbb+” with a Positive Outlook, indicating that the company has improved its ability to settle debt obligations.
“This rating upgrade reflects Axxela’s financial and operational stability particularly as we expand our footprints across Nigeria and West Africa,” said Timothy Ononiwu, the Chief Financial Officer of Axxela Limited.
Axxela which was fully acquired in April by Helios Investment Partners, a private equity firm focused on investments in Africa, after Oando fully divested from it, is building a $30 million gas pipeline network in parts of Lagos through its subsidiary, Gaslink in partnership with the Nigerian Gas Marketing Company.
Ononiwu said the new rating profile is symbolic “as we prepare to embark on a debt issuance program to drive our growth and development projects”.
According to Agusto& Co., the upgrade is underpinned by the company’s acceptable profitability, adequate working capital, satisfactory cash flow, moderate leverage and an experienced management team.
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To arrive at its rating, AgustoCo, said it took into consideration Axxela’s revenue diversification initiatives resulting in gas trading in neighbouring West African countries, as well as the company’s new ownership with over $3.6 billion funds under management.
The rating agency also said it expects the Axxela’sfinancial performance to improve, leveraging its growing and expanding customer base as well as the positive impact from gas exports.
Speaking on the new achievement, BolajiOsunsanya, the Chief Executive Officer of Axxela Limited, said the company continues to deliver exceptional performance across all the markets in which it operates with an intense focus on excellence and innovative service delivery.
Credit rating companies help investors decide how risky it is to invest money in a certain country or security by providing independent, objective assessments of the creditworthiness of companies and countries.
Top ratings agencies classify BBB ratings the lowest rating of investment grade securities, while ratings below “BBB” are considered speculative or junk. Axxela’s ratings indicate that it is classified as investments grade with low risk of default.
