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Dangote Petroleum Refinery & Petrochemicals FZE is offering investors in East Africa access to nearly 20% of its initial public offering, with the regional offer expected to raise as much as $300.4 million.
The details were contained in an information memorandum released on Wednesday after regulators in Kenya and Uganda cleared routes for eligible investors in both countries to participate in the share sale.
The development comes just two days after Nairametrics reported that Kenya’s Capital Markets Authority (CMA) had approved a Global Depositary Receipt (GDR) route that will allow eligible local investors to participate in the Dangote Petroleum Refinery & Petrochemicals IPO.
Dangote opens IPO to East Africa
Dangote Refinery aims to raise about 39 billion Kenyan shillings, equivalent to $300.4 million, from East African investors through the sale of about 729 million Global Depositary Receipts at 53.50 shillings each.
If fully subscribed, the East African offer would account for almost 20% of the refinery’s broader IPO target of at least $1.6 billion.
- “The GDR offer is intended to provide investors within East Africa region with access to the Dangote Petroleum IPO,” according to the information memorandum. “Application has been made to list the GDRs on the Nairobi Securities Exchange.”
The minimum success threshold for the GDR offer is 50 million shillings, while the minimum subscription is 2,000 GDRs and thereafter in multiples of 100.
Each GDR represents one underlying share in Dangote Petroleum Refinery & Petrochemicals FZE.
The application list closes on October 13, with allotments expected around November 12 and listing scheduled for 15 business days afterwards.
The Kenyan offer is being jointly advised by Renaissance Capital (Kenya) Ltd. and Lagos-based Renaissance Capital Africa, while Stanbic Bank is serving as custodian and receiving bank.
Kenya clears Dangote GDR route
On Monday, Kenya’s Capital Markets Authority approved the GDR structure that enables eligible Kenyan investors to participate in the Dangote Refinery IPO through negotiable certificates representing shares in the Nigerian company.
- The approval responded to growing interest from Kenyan investors and capital market participants seeking a way to invest in the Dangote Refinery IPO through their domestic capital market.
- Uganda’s Capital Markets Authority also authorised the promotion and distribution of the IPO to investors in the country.
- Kenya’s regulator said Dangote Petroleum is required to maintain a minimum public free-float of 15% of the total issued GDR pool among investors in the country.
In Nigeria, the Aliko Dangote Foundation has introduced a Share Grant Initiative that could allow eligible tertiary students applying for the refinery IPO to receive an additional 10 shares at no cost.
Kenya refinery deepens regional push
The groundbreaking for Dangote’s proposed refinery in Kenya, designed as a replica of the company’s Lagos facility, opened on September 30.
- The project is expected to cost about $17 billion and take approximately five years to complete.
- Aliko Dangote has offered East African countries a combined 30% equity stake in the proposed Kenya refinery.
The regional stake could give East African investors access to about $1.5 billion worth of the planned project.
David Ndii, economic adviser to Kenyan President William Ruto, disclosed at a capital markets forum in Nairobi that Kenya would take a 10% stake, while Ethiopia and Rwanda had also expressed interest.
