Dangote Industries limited (DIL) has signalled interest in selling another stake in Dangote Cement Plc. DIL had early this month sold 416 million shares in a deal valued at N86.1 billion. Together, the sales will amount to a total of 5% of the issued share capital of the company would have been divested. Dangote Industries Limited (DIL) is the investment vehicle for Alhaji Aliko Dangote’s interests in the various companies that make up the Dangote group.
Possible reasons behind the sale
Alhaji Aliko Dangote may be selling the stake in order to meet up with the minimum floatation requirements on the Nigeria Stock Exchange (NSE). NSE regulations states that companies trading on the floor of the exchange must have at least 10% of the shares available as free float. For companies listed on the premium section, which Dangote cement belongs to, the free float requirement is 20%. Dangote cement was however given a waiver when it was listed on the NSE in 2010.
Proceeds from the share sale could also be ploughed into the various expansion projects the group is inovolved in across the continent. Most notably the petrochemical refinery complex it is building in Nigeria.
Dangote cement recently announced an expansion programme across several of its plants in Africa. Dangote cement shares closed at N226 in yesterday’s trading session on the NSE. Year to date the shares are up 29%.
The Dangote Group was established in May 1981 as a trading conglomerate with an initial focus on cement but it has since diversified into in several areas ranging from cement, sugar and flour production to the petroleum industry with the building of one of Africa’s largest petrochemical refineries scheduled to take off in 2019.