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 aspires to source about N2.2 trillion from investors.
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The minimum subscription of the offer is 10 ordinary shares, translating to N5,250, Mr Dangote told the event.
Lagos-based Vetiva Advisory Services Limited is coordinating the capital raise.
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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 current capacity of the facility, 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 giving thought to quoting the 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 fast beyond retail level, with Abu Dhabi National Oil Co (ADNOC) which according to Bloomberg on Monday, was said to have opened conversations with the refinery towards buying a stake in it.
The global media outlet, citing interviews with sources, noted that an insider at ADNOC said Dangote Refinery has also received approaches from other big investors.
READ ALSO: AFC leads investment in Dangote Refinery’s $2.5bn private placement
Potential model for aspiring companies
The IPO’s launch on 14 September will ride on the improved liquidity Nigeria expects to attract from foreign portfolio capital, following the country’s restoration to frontier market status by FTSE Russell after a near-three-year downgrade that bogged it down under unclassified market status, consequently deterring international investors.
Likewise, an IPO on this scale could offer a template to similarly big Nigerian companies raring to become public 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 transitioning into gaining limited liability status, reviving the talks around the push last November.
The company, whose public image has long been marred by opacity in its operations and lack of transparency in publishing its accounts, may borrow a leaf from 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.
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