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The initial public offering of the Dangote Refinery, Africa’s largest oil refinery, is expected to open within the next 10 to 12 days.
According to Reuters, Aliko Dangote, disclosed this on Thursday while speaking to investors and analysts in Botswana during a visit to the Southern African country.
The IPO is coming a few months after the Refinery had secured $2.5 billion through a private placement, strengthening its balance sheet ahead of the planned IPO and its next phase of expansion.
What Dangote is saying
According to Dangote, the IPO is expected to raise about $5 billion, potentially making it the largest public offering in Africa.
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- “So our dream is that we want to make sure we double the capacity of the refinery, which will take us to 1.4 million barrels per day. The IPO will open in the next 10 to 12 days,” Dangote said.
The 650,000 barrels per day Dangote Refinery reached full nameplate capacity in February and has since tested production at 700,000 barrels per day.
Dangote said the group plans to double the refinery’s capacity to 1.4 million barrels per day, reinforcing its ambition to position the facility as a major supplier of refined petroleum products to African and international markets.
The refinery has benefited from stronger refining margins amid disruptions in the global oil market, particularly as tensions in the Middle East have increased demand for alternative fuel supplies.
Dangote Cement London listing planned for October
Meanwhile, Dangote said the secondary listing of Dangote Cement Plc on the London Stock Exchange is expected to take place in October.
The listing is expected to broaden the cement company’s access to international investors and provide greater exposure to global capital markets.
Dangote Cement is one of the flagship businesses of the Dangote Group and is listed on the Nigerian Exchange.
Dangote also disclosed plans to launch construction of a new refinery in Kenya in partnership with East African governments.
The refinery, which is expected to take up to three years to complete, will supply refined petroleum products to Kenya and other neighbouring countries.
The project is expected to help reduce East Africa’s dependence on imported refined fuels and would represent the Dangote Group’s largest refining investment outside Nigeria.
- “We are launching it on September 30,” Dangote said.
Get up to speed
The Dangote Refinery IPO has been gaining momentum globally since it was announced.
- On July 17, Nairametrics reported that the Refinery had raised $2.5 billion through a private placement ahead of the IPO, strengthening its financing position ahead of its next phase of expansion.
- The fundraising was subsequently confirmed by the company, which said the private placement attracted substantial investor demand and resulted in the issuance of new equity.
- The company said the transaction was subscribed at 3.7 times the initial offer size, with approximately $2.5 billion worth of new equity issued and allotted. It added that proceeds from the transaction would be used to support the ongoing expansion of the refinery and petrochemical complex.
Last month, the Refinery also secured a $400 million underwriting commitment from investors ahead of the IPO.
The $400 million commitment was provided by Marob Strategies and Consulting DIFC Ltd. and Lilium Capital Group, which have been appointed as co-financial advisers to Dangote Petroleum Refinery & Petrochemicals.
What you should know
Based on the Information Memorandum released earlier, the Dangote Refinery is valued at $39.1 billion.
Meanwhile, Dangote Refinery’s Chief Executive Officer, David Bird, has said the company would not pursue a foreign stock market listing for at least three years, saying its priority is the Nigerian IPO.
Explaining why the company is not pursuing an overseas listing immediately, Bird said the refinery wants to establish a stronger operating and financial track record before entering international capital markets.
