Rating Release
Agusto & Co. hereby affirms the “Bbb-” rating assigned to Lagos Free Zone Company
The rating expires on 30 June 2024.
Agusto & Co. hereby affirms the “Bbb-” rating assigned to Lagos Free Zone Company (“LFZC” or “the Company”). The rating is an upward notching of the standalone rating of LFZC under our credit enhancement criteria based on strong financial, administrative and technical support from Tolaram Group Incorporated (“TGI” or “Tolaram”) – its ultimate parent company. The rating affirmation also considers LFZC’s expanding stock of infrastructure and the prospects of increased commercial and trading activities at the Lagos Free Zone (“LFZ” or “the Zone”) following the recent commissioning of the Lekki Deep Seaport. However, the rating is constrained by the Company’s persistent losses as it has failed to maintain a reasonable scale of operations, especially during this growth phase, to sufficiently offset its operating and finance costs, as well as concerns over its concentrated ownership profile and governance structure.
The opinions expressed in this rating release do not represent investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.