Dangote Refinery Delays Overseas Listing for at Least Three Years

By Adedapo Adesanya

Dangote Petroleum Refinery will not pursue an overseas listing until it has established at least three years of proven production and financial performance, its chief executive, Mr David Bird, has said.

Mr Bird said the decision would allow the refinery to build a stronger operational track record before seeking an international listing that could support a higher valuation.

London has been mentioned as a possible destination for the refinery’s eventual foreign listing, although Mr Bird said the company would focus on its planned Nigerian initial public offering (IPO) in the near term.

The refinery is preparing for an October IPO on the Nigerian Exchange that could become Africa’s largest, with the oil firm seeking to encourage broad participation from Nigerians.

“We really want to drive participation,” Mr Bird told Reuters. “The mandate of the IPO was to be the people’s IPO.”

The refinery has submitted an application to the Securities and Exchange Commission for a potential $5 billion IPO, according to a source cited by the publication, although the final size of the offer has not been determined.

However, Mr Bird declined to comment on the proposed IPO size or the refinery’s valuation.

The company raised $2.5 billion in a private placement in July, a transaction that valued the refinery at about $40 billion. Africa Finance Corporation, which led a group of strategic investors in the deal, said the placement was 3.7 times oversubscribed.

Mr Bird said investor interest in the IPO had been strong during pre-marketing and the private placement, while preparations remained on schedule.

The refinery, owned by Mr Aliko Dangote, is also planning to double its refining capacity to 1.4 million barrels per day within three years, with the expansion expected to be funded partly through the IPO and debt.

The organisation currently supplies most of Nigeria’s gasoline and diesel demand and all of the country’s jet fuel needs.

It is also planning to establish a similar structure in Kenya to serve the East African market.