Company targets hospitality, real estate, logistics and power as GCR assigns Stable outlook
Odu’a Investment Company Limited has secured an AA-(NG) national scale long-term issuer rating and A1+(NG) short-term issuer rating from GCR Ratings, with a Stable outlook, in a development the investment company says underscores the strength of its financial position and investment portfolio.
The rating comes as the company plans to deploy up to $200 million over the next three to five years into strategic sectors, including hospitality, real estate, logistics and power, as part of efforts to diversify its portfolio and strengthen long-term earnings.
GCR said its assessment was supported by the quality of Odu’a Investment’s portfolio, conservative leverage, strong liquidity and disciplined capital management.
The rating agency also highlighted the liquidity of the company’s listed investments and the stable cash flows generated by its operating subsidiaries. According to GCR, most of Odu’a Investment’s equity holdings are publicly listed, providing transparent valuations and access to active secondary markets.
The Group Chairman, Dr Tola Kasali, described the rating as a recognition of Odu’a Investment’s five-decade history of prudent stewardship and value creation.
Kasali said the assessment affirmed the resilience of the company’s investment model, which combines strategic interests in listed equities with increasing contributions from its operating subsidiaries.
“The AA-(NG) rating is a strong affirmation of the resilience of our investment model, our conservative leverage, strong liquidity and the quality of our underlying assets, particularly in the context of the complexities associated with operating in frontier markets,” Kasali said.
He said the company was also encouraged by GCR’s assessment of its governance framework, particularly its independence from undue shareholder influence despite being owned by state governments.
The Group Managing Director, Mr Abdulrahman Yinusa, said the rating followed a rigorous assessment of the company’s financial and operational position and confirmed its strong liquidity profile.
Yinusa disclosed that Odu’a Investment had approximately two times liquidity coverage over the next 24 months, supported by a liquid listed investment portfolio valued at more than N80 billion and N4.8 billion in unencumbered cash.
He added that the group’s balance sheet remained largely ungeared, while the N3 billion bond issued by its subsidiary, Wemabod Limited, remained within the group’s servicing capacity.
According to Yinusa, the planned $200 million investment programme would focus on sectors with potential to broaden the group’s income base and create sustainable long-term value.
He said the Stable outlook provided a strong foundation for Odu’a Investment to pursue its expansion strategy while retaining the conservative financial discipline that underpins its balance sheet.
GCR, in its assessment, also identified Odu’a Investment’s low leverage as a key strength. The agency noted that the group’s balance sheet remained ungeared across most of the review period and that its debt-servicing capacity remained robust.
The rating agency further said Odu’a Investment’s liquidity sources exceeded its projected uses by approximately two times over the 24-month assessment horizon. This position remained intact even after GCR applied a 25 per cent stress test to the group’s listed holdings to account for risks associated with frontier markets.
On governance, GCR assessed Odu’a Investment as neutral to the ratings, pointing to its well-defined corporate structure, appropriately constituted boards and transparent financial reporting.
The agency also cited the company’s consistent record of clean audit opinions and dividend payments as evidence of sound corporate and financial practices.
The latest ratings and planned investment programme place Odu’a Investment in a stronger position to expand its operating businesses while preserving the financial prudence and liquidity profile that GCR identified as central to its credit strength.