Nigeria’s Dangote Group is planning an initial public offering for its refinery business that could raise about $1.5 billion, as the company seeks funding to significantly expand the capacity of its Lagos-based facility.
According to Reuters, the group plans to price shares in the refinery unit at ₦525 ($0.40) each, with about 4.1 billion shares expected to be offered. People familiar with the transaction did not disclose what percentage of the refinery the shares would represent.
The order book is scheduled to open on September 14, with the proposed transaction expected to become Africa’s biggest IPO.
Aliko Dangote, the group’s majority shareholder, separately confirmed that the offering was approaching, telling a business meeting in Botswana that the IPO would open within the next 10 to 12 days.
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The planned IPO is part of Dangote Group’s effort to raise capital for the expansion of the refinery, which the company intends to double in capacity to 1.4 million barrels of oil per day.
The transaction is also expected to include a 15% green shoe option, allowing the company to raise additional funds if demand for the shares exceeds the initial offer.
Dangote Refinery declined to comment to Reuters on the proposed terms of the transaction.
The planned listing represents another major step for the Lagos-based refinery as Dangote Group seeks additional capital to support its expansion.
If completed at the proposed size, the offer would also place one of Nigeria’s largest industrial assets before public-market investors at a significant scale.
The planned increase in refining capacity is equally important. Raising the facility’s capacity to 1.4 million barrels per day would substantially increase the amount of crude oil the refinery is capable of processing.
Attention will now turn to the opening of the order book and investor demand for the shares as the company moves closer to the proposed listing.
What This Means For Africa
The planned IPO could become a major moment for African capital markets, particularly if it proceeds as the continent’s biggest public offering.
For Nigeria, the transaction would give investors an opportunity to participate in one of the country’s largest privately owned industrial projects while providing Dangote Group with capital for further expansion.
The proposed capacity increase could also strengthen Africa’s refining infrastructure and expand the amount of crude oil processed on the continent.
Beyond the energy sector, the size of the proposed offering could provide an important test of investor appetite for large African industrial businesses seeking capital through public markets.
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Image Credit: CNN World
