Sunday Okobi
The GCR Ratings, an affiliate of Moodys, has assigned the Odu’a Investment Company Limited (OICL) a national scale long term issuer rating of AA-(NG) and short-term issuer rating of A1+(NG), with a stable outlook, in recognition of the company’s strong portfolio and conservative financial profile.
This inaugural rating underscores the Group’s robust financial profile, high-quality investment portfolio and disciplined capital management.
Commenting on the rating, the new OICL Group Chairman, Dr Tola Kasali, said: “The rating is a strong endorsement of the Group’s five-decade legacy of prudent stewardship and value creation, affirming the resilience of its investment model, which combines strategic holdings in listed equities with growing contributions from its operating subsidiaries.”
Kasali, who stated this in a statement issued and made available to THISDAY yesterday by the OICL Head of Branding and Communications, Victor Ayetoro, noted the AA-(NG) rating reflects the Group’s conservative leverage, strong liquidity, and the quality of its underlying assets, even as it navigates the complexities of frontier markets.
He added the Group is particularly encouraged by GCR’s recognition of its governance standards, which remain free from undue shareholders’ influence despite its state governments’ ownership structure.
On his part, the Group Managing Director of the company, Mr. Abdulrahman Yinusa, expressed delight at the outcome of the rigorous assessment, highlighting that: “GCR’s rating confirms the Group’s strong liquidity coverage of approximately 2x over the next 24 months, supported by a liquid listed portfolio valued at over N80 billion and unencumbered cash of N4.8 billion.”
He emphasized that the balance sheet remains largely ungeared, and the modest N3 billion bonds at the subsidiary, Wemabod Limited, is well within servicing capacity.
For what the future holds for the company, Yinusa disclosed that the Group is executing a deliberate strategy to deploy up to USD 200 million over the next three to five years into hospitality, real estate, logistics, and power sectors, “which will broaden diversification and enhance long-term earnings.”
He further expressed confidence that the stable outlook provides a solid platform to pursue these growth initiatives while maintaining conservative financial discipline.
GCR’s assessment highlighted that portfolio quality is a positive factor due to the liquidity of listed investments and stable cash flows from operating subsidiaries, with most equity investments publicly listed and benefiting from transparent valuations and active secondary markets.
The statement further noted that the stable outlook reflects GCR’s expectation that the Group will maintain significant investments in such financially strong and liquid securities, complemented by growing earnings contributions from its operating subsidiaries.
The rating also noted that low leverage is a strength, supported by an ungeared balance sheet across most of the review period and robust debt servicing capacity, while liquidity sources exceed uses by approximately 2x over the 24-month horizon, even after applying a 25 percent stress-test to listed holdings to reflect frontier market risks.
Ayetoro stated that the Group’s governance was assessed as neutral to the ratings, reflecting a well-defined corporate structure, appropriately constituted boards, transparent financial reporting, and a consistent history of clean audit opinions and dividend payments.