Rating Release
Agusto & Co. hereby upgrades the rating assigned to Lagos Free Zone Company (“LFZC” or “the Company”) to “Bbb”
The rating expires on 30 June 2025
Agusto & Co. hereby upgrades the rating assigned to Lagos Free Zone Company (“LFZC” or “the Company”) to “Bbb”. The rating upgrade underscores the notable improvement in the Company’s earnings capacity following the commercial operations of the Lekki Deep Seaport. The rating also considers LFZC’s expanding stock of infrastructure as well as its dollarized revenue, which has helped to build strong resilience against currency risk. This is in addition to the credit enhancement on the back of the strong financial support from Tolaram Pte Limited (“Toloram” or “the Group”) – its ultimate parent company. The rating is however constrained by the continuous vulnerability of the Company’s future earnings and cash flows to low capital inflows amid the country’s worsening economic crisis as well as concerns over its incremental borrowings.
LFZC is the licensee and operator of the Lagos Free Zone – the first privately owned economic zone in Nigeria. The 830-hectare free zone, which is integrated with a deep seaport, is promoted by Singapore-based Tolaram Pte Limited (previously Tolaram Group Incorporated). The Zone is being developed based on the “Live-Work-Play” concept and will be equipped with built-up standard industrial and warehouse facilities. Thirty-two (32) registered enterprises including notable global brands like BASF, Kellogg’s, Colgate, Arla, Dufil, Tata, as well as other local brands (including five commercial banks), have operational bases in the Zone as at 28 February 2024 although most of these entities are related to Tolaram Pte Limited.
