UPDATED: Dangote Refinery Sets Minimum Subscription For $1.6 Billion IPO

 

Aliko Dangote, Africa’s richest man and owner of the 700,000 barrel-per-day (bpd) plant, led the sign-off ceremony in Lagos on Monday.

Dangote Refinery has completed the endorsement of the offer documents for its initial public offering, putting it on course to launch the $1.6 billion public equity sale, regarded as Africa’s largest ever, next week.

Aliko Dangote, Africa’s richest man and owner of the 700,000-barrel-per-day (bpd) plant, led the sign-off ceremony in Lagos on Monday, in the presence of advisers and other parties to the pan-African offering, which aims to raise about N2.2 trillion from investors.

The minimum subscription of the offer is 10 ordinary shares, translating to N5,250, Mr Dangote told the event.

The Dangote Group is opening the offer to the mass-market end of retail investment, allowing investors as diverse as drivers, traders, cooks, and managers to partake in the transaction, its CEO remarked.

“There is no segregation on who can own these shares. We want every human being living on the continent to be part of this action, and I’m sure they will continue to be happy now, in the future, and forever,” Mr Dangote said.

According to Ukandu Ume Ukandu, CEO of FirstCap, the offer is targeting 10 million retail investors.

Lagos-based Vetiva Advisory Services Limited is coordinating the capital raise. It opens on 14 September and closes on 13 October.

The ceremony follows a key approval by the capital market regulator, the Securities and Exchange Commission (SEC), last week, with 4.1 billion shares up for subscription at N525 ($0.40) per unit.

The maiden share offer values the refinery at nearly $50 billion and plans to plough the proceeds into doubling the facility’s current capacity, which lies on a 6,180-acre expanse on the outskirts of Lagos, to 1.4 million bpd.

That could lift the market capitalisation of the Nigerian Exchange by more than one third when the shares are listed on the local bourse later this year.

A cross-border listing on the Johannesburg Stock Exchange, the continent’s biggest bourse, is in the works, just as the company is considering quoting its stock in Egypt, Kenya, Ghana and Rwanda.

In July, a private placement heralding the IPO raised $2.5 billion from institutional investors and HNIs, oversubscribed by 270 per cent.

Unmet demand from the private share sale could find its way into the IPO, which, long before its approval was announced, had drawn vast interest across Nigeria, where the SEC was impelled in June to stop all the marketing related to the share sale.

The regulator’s action followed reports that many retail investors, including those with little or no knowledge of how equity investment works, were already opening trading accounts ahead of the IPO.

Nevertheless, investor appetite is growing rapidly beyond the retail level, with Abu Dhabi National Oil Co (ADNOC) reportedly having opened discussions with the refinery about buying a stake in it.

According to Bloomberg, an insider at ADNOC said that the Dangote Refinery has also received approaches from other major investors.

Potential model for aspiring companies
The IPO’s launch will ride on the improved liquidity Nigeria expects to attract from foreign portfolio capital, following FTSE Russell’s restoration of the country to frontier market status after a near-three-year downgrade that had left it under unclassified market status, thereby deterring international investors.

Likewise, an IPO on this scale could offer a template for similarly large Nigerian companies raring to become publicly quoted firms and, by so doing, unlock access to financing through the capital market.

State-owned energy company NNPC Limited has been fiddling with the idea of going public and holding an IPO since 2021, after gaining limited liability company status, reviving talks around the push last November.

The company, whose public image has long been marred by operational opacity and a lack of transparency in publishing its accounts, may take a leaf from the Dangote Refinery’s listing.

In June, the refinery, which commenced production in January 2024, toppled the US to become the biggest external supplier of jet fuel to Europe, maintaining the feat in July.

SOURCEV PREMIUM TIMES