Nigeria’s Securities and Exchange Commission (SEC) has approved an initial public offering of Dangote Group’s refinery business, the company said on Friday, officially kicking off Africa’s biggest-ever share sale.
The IPO could raise approximately ₦2.15 trillion ($1.63 billion) if fully subscribed, with the company planning to sell 4.1 billion ordinary shares at 525 naira per share, according to the statement.
The listing will test investor appetite for one of the continent’s most ambitious industrial projects.
The 650,000-barrel-per-day refinery, built at a cost of about $20 billion on the outskirts of Lagos, has transformed Nigeria’s fuel market and emerged as a major beneficiary of supply disruptions linked to the Iran war, exporting jet fuel across Africa and into Europe.
The SEC said it had registered the refinery company’s existing 120.13 billion ordinary shares, implying a valuation of around $47 billion, according to Reuters calculations.
“With SEC approval now secured, the refinery is poised to embark on a historic public offering that could significantly broaden investor participation in one of Nigeria’s most transformative industrial ventures,” the company said in the statement.
The order book for the offer is set to open on September 14, a source with knowledge of the matter said earlier, in line with a time frame indicated by Aliko Dangote, the group’s majority shareholder, on Thursday.
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Dangote Group declined to comment on the timing of the offer.
The refinery’s majority shareholder is raising cash to fund a planned doubling of capacity to 1.4 million barrels per day, having already secured a $400 million underwriting commitment for the IPO.
A formal signing ceremony with the stock exchange to launch the deal will be held next week, two company sources told Reuters.
AFRICA’S RICHEST MAN
The refinery’s rapid growth has helped fuel investor interest in the share sale, market participants say.
The IPO will include a so-called greenshoe option to sell around 15% more shares if demand exceeds supply, the first source said.
A private placement in July indicated a refinery valuation of $40 billion, but some investors and analysts say this appears high relative to other listed stand-alone oil refiners.
Turkey’s Tupras, which has a similar refining capacity spread across four sites, has a market value of about $12 billion, while New York-listed HF Sinclair with capacity of roughly 678,000 bpd, is valued at about $16 billion.
Aliko Dangote told a business meeting in Botswana on Thursday that he aimed to build the refinery, which does not publicly disclose detailed financial results, into one of Africa’s largest companies, generating more than $12 billion in earnings before interest, tax, depreciation and amortization (EBITDA).
Dangote, Africa’s richest man with a net worth estimated at between $31 billion and $35 billion, said he wanted investors from across the continent to participate in the offering, including Nigerian retail investors.
“This is not a Nigerian listing. It’s an African listing, and we are going to pay everybody, including the Nigerian listing, in dollar terms,” he said in the Botswana speech.
