Dangote Refinery May Open IPO at N525 Per Share

By Adedapo Adesanya

Dangote Refinery may price its highly anticipated initial public offering (IPO) at N525 per share, with the company planning to sell 4.1 billion shares when the offer opens later this month.

Reuters, which quoted sources familiar with the deal, said the N525 price is currently being considered and about $1.5 billion is expected from the exercise.

The order book for the offer is expected to open on September 14, while a formal signing ceremony with the Nigerian Exchange (NGX) is scheduled for next week.

The IPO is expected to include a 15 per cent greenshoe option, which would allow the company to sell additional shares if demand exceeds the initial offering.

The sources did not disclose what percentage of the refinery the 4.1 billion shares would represent.

The capital raised will be used to fund Dangote Refinery’s expansion plans, with the company seeking to more than double its capacity from its current 650,000 barrels per day to 1.4 million barrels per day. The refinery has already reached its full nameplate capacity and has tested output of up to 700,000 barrels per day.

The planned listing is expected to be one of Africa’s largest IPOs. The refinery, located near Lagos, was built at a cost of about $20 billion and has transformed Nigeria’s fuel market since beginning operations.

Investor interest has also been boosted by stronger refining conditions and disruptions in global fuel supplies linked to the Iran war, with the refinery exporting jet fuel to markets across Africa and Europe.

A private placement in July indicated a valuation of about $40 billion for the refinery. However, some investors and analysts have questioned the valuation when compared with other listed refiners, including Turkey’s Tupras and US-based HF Sinclair.

Mr Aliko Dangote, founder and majority shareholder of Dangote Group, earlier said the IPO would open within 12 days.

He has also said the IPO is intended to attract investors across Africa, including Nigerian retail investors, describing the planned listing as an African listing, rather than one limited to Nigeria, and said investors would be paid in Dollar terms.