Dangote Eyes West African Bourses to Expand $1.6bn Refinery IPO

By Adedapo Adesanya

Dangote Group has held discussions with West African stock exchanges on plans to extend access to its $1.6 billion refinery initial public offering (IPO) beyond Nigeria, although differences in regulatory requirements across markets have complicated the process.

The chief executive of the Bourse Régionale des Valeurs Mobilières (BRVM), Mr Edoh Kossi Amenounve, disclosed this in an interview with Reuters on the sidelines of the Africa Financial Summit in Luanda.

BRVM is the regional stock market serving the eight member states of the West African Economic and Monetary Union (WAEMU): Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo. Nigeria is not a WAEMU member.

The proposed expansion of the IPO to other African markets could broaden investor participation in the refinery while providing investors outside Nigeria with an opportunity to acquire exposure to the company.

Mr Amenounve said the discussions began in April at the invitation of Mr Aliko Dangote, with the objective of determining how other African exchanges could participate in the share sale despite differences in their listing regulations.

He said reaching a consensus on how the IPO could be conducted across multiple markets had proved difficult.

One of the options under consideration is the use of Global Depositary Receipts (GDRs), which would allow financial instruments representing Dangote Refinery shares to be listed on other African exchanges.

He cited similar arrangements previously implemented in Kenya and Botswana as possible models for the proposed cross-border offering.

The development comes after Dangote Refinery’s IPO attracted approximately N6.4 trillion in subscriptions from Nigerian retail and institutional investors before closing on October 28.

The subscription figure, equivalent to about $4.77 billion, was nearly three times the amount of shares available in the offering, according to reports.

The refinery’s shares are expected to be listed on the Nigerian Exchange (NGX) later this month.