Dangote refinery targets $5 billion IPO by October in Africa’s biggest market listing

Dangote Petroleum Refinery & Petrochemicals is targeting a $5 billion initial public offering (IPO) expected to conclude by October, in what could become the largest stock market listing in African history.

The planned listing was reported by Reuters on Tuesday, citing two undisclosed sources familiar with the transaction.

According to the report, the IPO application has already been submitted to Nigeria’s Securities and Exchange Commission (SEC), with approval expected in the coming weeks and a prospectus likely to be published in September.

The planned public listing comes less than two weeks after Dangote Petroleum Refinery confirmed the successful completion of a $2.5 billion private placement, marking one of the largest corporate fundraising transactions by an African company.

What they are saying

The proposed IPO, which could become the biggest market listing ever undertaken in Africa, has attracted significant interest from investors and capital market operators across the continent.

• According to the report, stock exchanges in South Africa, Kenya, Egypt, Ghana, and Rwanda have held a series of meetings with advisers to the refinery in recent months as they seek to participate in the transaction.
• One of the sources said Kenya’s capital markets could contribute as much as $500 million of the refinery’s $5 billion fundraising target, citing strong interest from local institutional investors, including pension funds.
• A second source familiar with the deal said Dangote Petroleum Refinery & Petrochemicals FZE is expected to receive SEC approval in the coming weeks, paving the way for the publication of a prospectus in September.

The source added that while the IPO is targeting $5 billion, the final amount will depend on regulatory approval, with the primary listing expected to take place on the Nigerian Exchange.

Get up to speed

On Thursday, July 23, Dangote Petroleum Refinery confirmed the successful completion of a $2.5 billion private placement, which the company described as one of the largest corporate fundraising transactions by an African company.

The company said the fundraising exercise was oversubscribed, with proceeds earmarked to support the ongoing expansion of the Dangote Petroleum Refinery and Petrochemicals complex.

• “The Private Placement achieved 3.7 times subscription relative to the initial offer size and resulted in the issuance and allotment of approximately US$2.5 billion in new equity,” the company said.

The latest fundraising also aligns with an earlier Nairametrics report published in April, which said billionaire industrialist Aliko Dangote was considering listing around 10% of Dangote Petroleum Refinery & Petrochemicals FZE on multiple African stock exchanges as part of efforts to raise funding for the next phase of expansion across his industrial businesses.

What you should know

A successful $5 billion IPO would have significant implications for both Nigeria’s capital market and the Dangote business empire.

The listing could become one of the largest additions to the Nigerian Exchange in recent years and would represent a substantial share of the market’s total capitalisation, potentially increasing liquidity and attracting more foreign institutional investors.

• For Dangote, the fundraising is expected to support the next phase of expansion of his energy and industrial businesses.
• The company is already planning to expand the Lagos refinery, which is currently operating at full capacity, to a projected 1.4 million barrels per day, positioning it among the world’s largest refining complexes.
• Beyond Nigeria, plans are also advancing to develop a similar refinery project in Kenya, expected to cost $17 billion, is the group sweeks to deepen its presence in East Africa’s energy market.

The refinery listing is also part of a broader capital markets push across the Dangote Group.

Dangote Cement is expected to pursue a London listing before the end of the year, according to Mariya Dangote, Executive Director overseeing the group’s cement and foods businesses, signalling a wider strategy to access international capital markets for future expansion.