Kenyans can now invest in Dangote Refinery through a $300 million Nairobi Depositary Receipt programme, giving East African investors a new route to gain exposure to Nigeria’s landmark oil refining project. The programme offers nearly 20 percent of the refinery's initial public offering. Dangote Petroleum Refinery & Petrochemicals FZE is offering 729 million global depositary receipts at 53.50 Kenyan shillings each.
The depositary receipts represent shares in Dangote’s Lagos-based refinery and will be listed on the Nairobi Securities Exchange. Each receipt represents one share in the refinery. Kenya’s Capital Markets Authority has approved the offer, while Uganda’s regulator has authorised its promotion to local investors. This allows investors in East Africa to participate in the ownership of one of Africa’s largest industrial projects.
The offer in Kenya is part of a larger plan to raise funds for the refinery. In Nigeria, the company is seeking to raise about $1.6 billion through the sale of 4.1 billion shares at 525 each. The Nigerian offer values the refinery at about $47.6 billion. However, Kenyan investors will pay a slightly higher price for the depositary receipts compared to Nigerian shares.
The minimum investment in Kenya is significantly higher than in Nigeria. Investors must purchase at least 2,000 receipts, costing about 107,000 Kenyan shillings, or $824. In contrast, the minimum investment required for the Nigerian offer is about $4. This may exclude some small Kenyan investors from the offer.
Despite the higher minimum investment, the Nairobi offer requires only 50 million shillings, or about $385,000, to proceed. This means the listing can go ahead even if demand from Kenyan investors is relatively weak. The offer is scheduled to close on October 13, the same date as the Nigerian share sale.
Allotments are expected around November 12, while trading of the depositary receipts on the Nairobi Securities Exchange is expected to begin in early December. Renaissance Capital is acting as lead adviser on the transaction, while Stanbic Bank Kenya is the custodian. The depositary receipts are not linked to Dangote’s proposed refinery project in Lamu, Kenya.
The Nairobi offering expands access to Dangote Refinery beyond Nigeria and provides investors in East Africa with an opportunity to participate in the ownership of one of Africa’s largest industrial projects. The offer is a significant development in the region, providing a new investment opportunity for East African investors.
Key points
- Kenyans can invest in Dangote Refinery through a $300 million Nairobi Depositary Receipt programme.
- The depositary receipts represent shares in Dangote’s Lagos-based refinery and will be listed on the Nairobi Securities Exchange.
- The minimum investment in Kenya is significantly higher than in Nigeria, at 107,000 Kenyan shillings, or $824.
