Odu’a Investment Secures AA-(NG) Rating from GCR

Odu’a Investment Secures AA-(NG) Rating from GCR

Odu’a Investment Secures AA-(NG) Rating from GCR

…Affirms commitment to value creation, strategic expansion

Odu’a Investment Company Limited has secured a national-scale long-term issuer rating of AA-(NG) and a short-term issuer rating of A1+(NG) from GCR Ratings, with a Stable Outlook, underscoring the strength of its investment portfolio and conservative financial profile.

The inaugural rating, announced by the company on Monday, recognises Odu’a’s robust financial position, high-quality investment portfolio and disciplined approach to capital management.

Commenting on the rating, the Group Chairman, Dr. Tola Kasali, described it as a strong endorsement of Odu’a’s five-decade legacy of prudent stewardship and value creation.

Kasali said the rating affirmed the resilience of the company’s investment model, which combines strategic holdings in listed equities with growing contributions from its operating subsidiaries.

According to him, the AA-(NG) rating reflects Odu’a’s conservative leverage, strong liquidity and quality of underlying assets, despite the complexities associated with operating in frontier markets.

He added that the company was particularly encouraged by GCR’s recognition of its governance standards, which, he said, remained free from undue shareholder influence despite the company’s ownership by state governments.

The Group Managing Director, Mr. Abdulrahman Yinusa, also expressed delight at the outcome of the assessment, noting that the rating validated Odu’a’s strong liquidity position.

Yinusa said the Group had liquidity coverage of approximately two times over the next 24 months, supported by a liquid listed portfolio valued at more than N80 billion and unencumbered cash of N4.8 billion.

He stressed that the Group’s balance sheet remained largely ungeared, while the modest N3 billion bond at its subsidiary, Wemabod Limited, remained well within its servicing capacity.

Looking ahead, Yinusa disclosed that Odu’a was pursuing a deliberate investment strategy that could see the Group deploy up to $200 million over the next three to five years in hospitality, real estate, logistics and power.

He said the investments were expected to broaden the Group’s diversification and strengthen its long-term earnings profile.
Yinusa added that the Stable Outlook provided a solid platform for the Group to pursue its expansion strategy while maintaining its conservative financial discipline.

In its assessment, GCR identified portfolio quality as a positive rating factor, citing the liquidity of Odu’a’s listed investments and stable cash flows from its operating subsidiaries.

The rating agency noted that most of the Group’s equity investments were publicly listed, providing transparent valuations and access to active secondary markets.
GCR also said the Stable Outlook reflected its expectation that Odu’a would maintain significant investments in financially strong and liquid securities, while continuing to grow earnings contributions from its operating subsidiaries.

Low leverage was also identified as a key strength, supported by an ungeared balance sheet across most of the review period and robust debt-servicing capacity.
According to the assessment, the Group’s liquidity sources exceeded its uses by approximately two times over the 24-month horizon, even after a 25 per cent stress test was applied to listed holdings to account for frontier-market risks.

GCR assessed Odu’a’s governance as neutral to the ratings, citing its well-defined corporate structure, appropriately constituted boards, transparent financial reporting, and consistent record of clean audit opinions and dividend payments.