Axxela gets favourable issuer ratings of BBB+(NG), A2(NG)

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Bolaji Osunsanya

Axxela Limited (Axxela), a Helios Investment Partners portfolio company – has been accorded favourable national scale issuer ratings of BBB+(NG) and A2(NG) in the long term and short term by Global Credit Ratings (GCR). The ratings are valid until September 2021 and were ascribed due to Axxela’s strategic initiatives, continued diversification of revenue sources, and robust business continuity plans. Agusto & Co. also recently revalidated Axxela’s corporate credit rating as “Bbb+” with a stable outlook until June 30, 2021.

Commenting on the rating renewal, Bolaji Osunsanya, Axxela’s Chief Executive Officer, said: “Given the global headwinds faced by many sectors due to the pandemic, the company’s rating profile reaffirms our healthy financial status, competitive position, and the application of Environmental, Social, and Governance (ESG) standards across our sustainable business model. As an industry leader, Axxela will continue to spur wider industrialisation to develop communities and maximise shareholder value.”

According to the GCR report, “Axxela’s ratings reflect its leading position within the Nigerian natural gas distribution market, supported by long term distribution franchises in Lagos and Port Harcourt.

Other key strengths which have underpinned the stability of earnings and cash flows include long term agreements with suppliers and customers, as well as a shipper license on the West African Gas Pipeline which enables Axxela supply gas to other West African countries. Axxela evidenced resilient performance in 3Q FY20, despite the COVID-19 disruptions, and reported strong revenue growth over the review period underpinned by a larger client base, rising volumes, and firmer selling prices.”

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Axxela recently became the first Nigerian midstream company to successfully achieve a dual-listing of debt securities on the Nigerian Stock Exchange (NSE) and the FMDQ markets. The listing of the N11.5billion Series 1 Bonds is part of a multi-year N50billion Debt Issuance Programme issued through a special purpose vehicle – Axxela Funding 1 PLC.

“We appreciate the continued recognition of our enterprise by the financial community, and the positive credit ratings further enhance Axxela’s anticipated portfolio diversification initiatives. Confidence in our company’s future increases the certainty of access to capital markets, which are critical to our continued growth and midterm regional expansion strategy,” said Timothy Ononiwu, Axxela’s Chief Financial Officer.

Lagos State government and Nigerian Maritime and Safety Agency (NIMASA) have said they would collaboratively work to decongest Apapa of its perennial gridlock.

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Apapa, a host community to Nigeria’s busiest seaports (Apapa and Tin Can Ports), is daily bedevilled by gridlock. It has been blamed on a number of factors, including port management of the ports, multiple security agencies, absence of electronic call-up system to regulate the entry of trucks into the ports, as well as the activities of tanker drivers who occupy roads leading in and out of the ports. As a result, residents and businesses in Apapa have continued to suffer losses with property value depreciating as businesses relocate to saner environments.

The Federal Government recently disbanded the traffic management task force it set up for Apapa and handed over the responsibility to the Lagos State government, which has constituted a committee to drive the traffic management process.

The state government and NIMASA agreed on Tuesday they would be leveraging the committee to decongest the ports environment and restore sanity. This, if achieved, is expected to bring relief to businesses, residents and the Apapa precincts in general.

They agreed to this when Bashir Jamoh, the director-general of NIMASA, led top management of the agency on a visit to Governor Babajide Sanwo-Olu, at Lagos House, Ikeja.

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Jamoh said this was necessary because, in spite of the rising insecurity within the Nigerian maritime space, Lagos remains the only state with the highest level of maritime safety.

While identifying the area of partnerships between the state government and NIMASA, the DG said the extinction of the fishing industry was due to insecurity on the waterways, adding that the agency was ready to partner Lagos State to ensure safety on the waterways.

“We are seeing the extinction of the fishery industry due to maritime insecurity. About 98 per cent of the maritime insecurity originates from land to sea but Lagos still remains the state that has the highest maritime security,” he said.

Other areas of partnerships, he said, would be ferry services, waste management on the sea, and the extension and development of the shipping industry.

“We need alliances and we have recognised Lagos State as one of our alliances,” he said.

Governor Sanwo-Olu on his part, said Lagos was responsible for over 70 percent maritime activities, adding “it is important we work collaboratively.”

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