Dangote Refinery Gets $1bn Backing from Advisers Ahead of IPO

By Adedapo Adesanya

Two advisers to Dangote Petroleum Refinery’s planned Initial Public Offering (IPO) on Tuesday announced a $1 billion underwriting programme for the offering, giving the plant potentially powerful new route to African and international capital.

Marob Strategies and Consulting DIFC Limited and Lilium Capital Group said in a statement that the programme comprises a completed and funded $600 million private placement and a $400 million underwriting commitment for the planned IPO.

The $600 million placement is already complete.

The remaining $400 million commitment will only come into effect when the IPO is launched and remains subject to market conditions, regulatory and corporate approvals, and definitive documentation and securities-law requirements, according to the advisers.

Dangote Petroleum Refinery, built by Africa’s richest man Aliko Dangote, has become a symbol of Nigeria’s attempt to reduce dependence on imported refined petroleum products while building domestic refining and petrochemical capacity.

Recall that it has applied to Nigeria’s Securities and Exchange Commission (SEC) for a $5 billion IPO. However, the final size of the offering has yet to be determined.

The refinery has emerged as a major beneficiary of supply disruptions linked to the Iran war, increasing sales of jet fuel across Africa and into Western Europe as buyers seek alternative supplies.

The planned listing could rank among the largest IPOs in Africa, depending on the final size of the offering and market conditions at launch.

“This is an important milestone for DPRP and for African capital markets,” Mr Dangote said in the announcement, describing the completed placement and IPO underwriting commitment as a sign of confidence in the refinery’s strategic role.

On his part, Marob Strategies Chairman, Mr Benedict Oramah, a former president of the refinery’s backer Africa Export-Import Bank, said investor interest demonstrated appetite for African-led capital markets transactions involving transformative assets on the continent.

Adding his part, Lilium Capital Chairman, Mr Simon Tiemtoré, similarly framed the deal as an effort to connect major African investment opportunities with institutional capital across the continent and international markets.