Dangote Refinery has completed the endorsement of documents for its initial public offering (IPO), clearing a major hurdle ahead of the planned launch of its $1.6 billion public equity sale next week.
The offering, which is expected to be Africa’s largest IPO, could raise about ₦2.2 trillion from investors.
Aliko Dangote, Africa’s richest man and owner of the 700,000-barrel-per-day (bpd) refinery, led the sign-off ceremony in Lagos on Monday, alongside advisers and other parties involved in the pan-African offering.
Dangote said the minimum subscription for the offer would be 10 ordinary shares, valued at ₦5,250.
Lagos-based Vetiva Advisory Services Limited is coordinating the capital raise.
The signing follows approval granted by the Securities and Exchange Commission (SEC) last week for the offer of 4.1 billion shares at ₦525 ($0.40) per share.
The IPO values Dangote Refinery at nearly $50 billion, with proceeds expected to fund the expansion of the facility from its current 700,000 bpd capacity to 1.4 million bpd.
The planned expansion could significantly boost the market capitalisation of the Nigerian Exchange, potentially increasing it by more than a third when the refinery’s shares are listed later this year.
The company is also pursuing a cross-border listing on the Johannesburg Stock Exchange, Africa’s largest bourse, while considering additional listings in Egypt, Kenya, Ghana and Rwanda.
Strong investor interest
Investor interest in the refinery has been building ahead of the IPO.
In July, the company raised $2.5 billion through a private placement targeting institutional investors and high-net-worth individuals. The offering was reportedly oversubscribed by 270 per cent.
Some of the unmet demand from the private placement could spill into the public offering, which has attracted substantial interest from retail investors.
The level of retail interest prompted the SEC in June to halt marketing activities related to the IPO after reports emerged that some prospective investors, including people with little or no experience in equity investing, were opening trading accounts in anticipation of the offer.
Interest has since extended to major international investors. Bloomberg reported on Monday that Abu Dhabi National Oil Company (ADNOC) had opened discussions with Dangote Refinery over a possible stake acquisition.
Citing sources familiar with the matter, Bloomberg also reported that the refinery had received approaches from other major investors.
Boost for Nigeria’s capital market
The IPO is scheduled to launch on September 14, coinciding with expectations of increased foreign portfolio inflows following Nigeria’s return to frontier market status under FTSE Russell.
The country had spent nearly three years under unclassified market status, a classification that discouraged some international investors from allocating funds to Nigerian assets.
Beyond Dangote Refinery, the offering could set a precedent for other large Nigerian companies seeking to raise capital through the domestic and regional markets.
State-owned energy company NNPC Limited has considered an IPO since its transition to limited liability status. Discussions about a potential listing were revived in November last year.
A successful Dangote Refinery listing could provide a model for NNPC and other major Nigerian companies looking to access long-term financing through the capital market.
Dangote Refinery, which began production in January 2024, has rapidly expanded its presence in international fuel markets. In June, it overtook the United States to become Europe’s largest external supplier of jet fuel, a position it retained in July.
