The Dangote Group is in discussions with Nigeria's Securities and Exchange Commission (SEC) to increase the shares offered in its ongoing Initial Public Offer (IPO) for the Lagos refinery, citing high demand from both retail and institutional investors. The IPO, which is Africa's largest ever, aims to raise 207.5 billion Shillings by selling 4.1 billion ordinary shares, equivalent to 3.4 percent of the Dangote Petroleum Refinery.
The President of Dangote Group, Aliko Dangote, stated that the decision to approach the SEC follows the high demand for the shares. The IPO, which runs from September 14 to October 13, targets both retail and institutional investors, with a goal of having at least 10 million unique shareholders. Dangote expressed willingness to accommodate more investors than initially advertised.
The demand for shares has been significant, with Dangote mentioning that interest from Kenya and Botswana alone could fill the initial offering. To accommodate more investors, the Group may consider diluting existing shareholders' stakes to make more shares available. The current shareholders of Dangote Oil Refining Company Ltd include Dangote Industries Ltd, Nigerian National Petroleum Company, and Greenview International Corporation, with stakes of 14.9 percent, 6.8 percent, and 6.5 percent, respectively.
The IPO has been marketed as a "people's IPO" and is seen as a bet on Africa's need for greater refining capacity. Strong demand has temporarily disrupted some financial technology platforms as investors rush to buy into the refinery. Kenyan investors can participate in the IPO with a minimum investment of 49 Shillings via the Nairobi Securities Exchange (NSE).
Investors can buy shares valued at 49 Shillings per piece through global depository receipts (GDRs), which enable investors to hold shares in foreign companies without directly trading on offshore markets. Of the amount to be raised through the IPO, 82.17 billion Shillings will be allocated to developing and expanding supporting infrastructure, while 67.09 billion Shillings will be used to enhance core refining process units.
According to Dangote, the primary purpose of the IPO is not to raise financing for the refinery's expansion but to open ownership to retail and institutional African investors. The IPO aims to widen ownership of a home-grown enterprise to Africans who wish to be part of the story. Dangote Group also plans to list the East African Refinery in Lamu on the NSE.
The successful listing of the Dangote refinery could set a precedent for other African companies seeking to raise capital through IPOs. With its massive refining capacity, the Dangote Petroleum Refinery is poised to play a significant role in meeting Africa's growing demand for petroleum products. The increased interest in the IPO underscores the appetite for investment opportunities in Africa's growing industries.
Key points
- The Dangote Group is in talks to increase the shares offered in its Lagos refinery IPO due to high demand from investors.
- The IPO aims to raise 207.5 billion Shillings and targets at least 10 million unique shareholders.
- Kenyan investors can participate in the IPO with a minimum investment of 49 Shillings via the Nairobi Securities Exchange (NSE).
