On Monday, the Dangote Petroleum Refinery launched an initial public offering (IPO). It issued 4.1 billion ordinary shares, worth a total USD 1.6 billion (NGN 2.15 trillion), or a 3% stake in the company. The IPO, if fully subscribed, will be Africa’s largest ever, and the company could exercise an option to raise the offering to USD 2.1 billion, if there is enough demand.
The offering set a share price of NGN 525 (USD 0.4) and a requirement to purchase at least ten shares to participate. Describing it as a “people’s IPO”, Aliko Dangote, President of Dangote Group and Africa’s richest man, marketed the offering to retail investors – ordinary Nigerians.
This comes after institutional investors participated in a private placement of USD 2.5 billion for a 6% stake in July, at a slightly cheaper price per share. This is because, according to company documents, the valuation of the company has increased from USD 40 billion in July to USD 49 billion now.
The refinery is located around 90km east of Lagos and is Africa’s largest, with a capacity of 700,000 bpd. The facility was built for a cost of approximately USD 20 billion.
Already the largest player in the African downstream industry, Dangote also has plans for another refinery of roughly equal capacity. The Lamu Refinery, off the coast of Kenya, is expected to begin construction this month, and eventually have a capacity of 600,000 – 700,000 bpd. The inputs for this refinery, however, are more precarious.
Source: theenergyyear.com