Market listing plans for Dangote refinery
Nigeria’s Dangote refinery plans Africa’s largest-ever market listing.
Additionally, the Dangote refinery listing aims to raise about $5 billion through an IPO.
Additionally, officials expect the IPO to be completed in October.
The refinery, mostly controlled by Aliko Dangote, benefited from the Iran war by exporting jet fuel.
Additionally, it supplied jet fuel to Western Europe and throughout Africa during shortages.
To increase the capacity of the 650,000-barrel-per-day refinery in Lagos, Dangote intends to raise money.
Furthermore, he aims to duplicate its success with a comparable operation in Kenya.
Ultimately, his goal is to make Africa an exporter and less reliant on pricey, imported fuels.
The insider claims that the projected schedule for the planned IPO is fairly tight.
Additionally, it has drawn attention from all over the continent.
To participate in the transaction, stock markets in South Africa, Kenya, Egypt, Ghana, and Rwanda have met with the refinery’s counsel.
Additionally, they have done so several times in recent months.
The source reports tremendous interest among local investors, including pension funds, in the issue. Additionally, Kenya’s capital markets could generate up to $500 million for the Dangote refinery IPO.
The company, Dangote Petroleum Refinery & Petrochemicals FZE, submitted its IPO application to Nigeria’s Securities and Exchange Commission.
Consequently, it expects to gain permission in the upcoming weeks and to issue a prospectus in September.
The IPO’s goal was $5 billion.
In addition, the Nigerian Stock Exchange will be the major listing.
The actual amount would depend on what the Nigerian regulator authorized.
On Tuesday, total capitalization was $116 billion.
Consequently, the aim would represent slightly more than 4% of Nigeria’s primary All Share index.
However, the $40 billion valuation appears ambitious.
The source did not know the possible valuation or the share size that would be offered publicly.
Analysts valued the company at about $40 billion.
Consequently, it followed a $2.5 billion private placement for a 6% stake last month.
Moreover, given the worth of other independent oil refiners, such a valuation appears ambitious.
It has four refineries and the same capacity as Dangote, Turkey’s Tupras, with a market value of only $12 billion.
HF Sinclair lists itself on the New York Stock Exchange and has a $16 billion market capitalization and capacity of 678,000 bpd.
The minimum free float on the main board of the Nigerian Stock Exchange is 20%.
However, there have been several exceptions to that rule.
Dangote Cement, another company in Dangote’s industrial empire, has a free float of little more than 12.7%.
Other capital markets on the continent that wish to participate in this transaction must develop “structured solutions” for their investors. Additionally, they must tailor these structures to benefit those investors.
There are currently no plans to cross-list or dual-list the shares in other regional markets. Additionally, the $20 billion Dangote refinery began operations in 2024 and reached full capacity earlier this year. A little more than 7% of it is owned by Nigeria’s state oil company, NNPC.
In April, 69-year-old Aliko Dangote stated that the refinery would increase its daily output.
Additionally, it would reach 1.4 million barrels.
The wealthiest man in Africa.
Dangote has an estimated net worth between $31 billion and $35 billion. Additionally, he owns a conglomerate that produces cement, sugar, and salt. The group also runs car and truck assembly plants in over a dozen African countries.
He is eager for the IPO to be a pan-African venture. Moreover, this aligns with his vision of helping the continent find local solutions to development challenges. The goal was to enable capital markets throughout the continent to participate in “an African champion.”
We will decide the specifics about regional capital markets receiving pre-allocations and underwriting later.
Additionally, we will decide on permission to join an open offer later based on demand.
Consequently, allocations depend on overall demand for the entire offering.
Dangote often takes pride in being among the few African billionaires who keep their vast wealth in Nigeria. However, he keeps his wealth in Nigeria instead of moving it to offshore banks.
Together with the governments of East Africa, he intends to begin building a refinery along Kenya’s coast. However, we are unsure whether some IPO money will fund that project.
Additionally, the Dangote refinery will offer investors a choice of payment in dollars or naira. Investors may choose their preferred currency.
