Dangote Refinery sets minimum subscription for $1.6 billion IPO

Dangote Refinery has set a minimum subscription of 10 shares, or N5,250, for a $1.6 billion initial public offering that is being billed as Africa’s largest. Aliko Dangote, Africa’s richest man and owner of the 700,000-barrel-per-day plant, led the document sign-off ceremony in Lagos on Monday.

The offering includes 4.1 billion shares priced at N525, or $0.40, each. Lagos-based Vetiva Advisory Services is coordinating the capital raise, which aims to attract about N2.2 trillion from investors. Nigeria’s Securities and Exchange Commission approved the offer last week.

The refinery plans to use the proceeds to double its current capacity to 1.4 million barrels per day. The facility occupies 6,180 acres on the outskirts of Lagos. If the shares list on the Nigerian Exchange later this year, the offering could increase the bourse’s market capitalization by more than one third.

The company is also preparing for a possible cross-border listing on the Johannesburg Stock Exchange and is considering quotations in Egypt, Kenya, Ghana and Rwanda. A private placement in July raised $2.5 billion from institutional investors and high-net-worth individuals, attracting subscriptions 270 percent above the amount offered.

Demand for the IPO had already spread beyond retail investors. The regulator halted marketing linked to the share sale in June after reports that some inexperienced retail investors were opening trading accounts in anticipation. Bloomberg also reported that Abu Dhabi National Oil Co. had opened discussions about buying a stake, while other major investors had approached the refinery. The IPO is scheduled to launch on 14 September, as Nigeria seeks to benefit from renewed foreign portfolio investment after FTSE Russell restored its frontier-market status.

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The minimum subscription of the offer is 10 ordinary shares, translating to N5,250.