Dangote Refinery Gets SEC Nod For N2.15trn IPO At N525/Share

Dangote Group has announced that the Securities and Exchange Commission (SEC) has approved the proposed initial public offering (IPO) of Dangote Petroleum Refinery and Petrochemicals FZE, with the shares priced at N525 each.

The conglomerate disclosed the development in a statement on Friday, paving the way for what could become one of the largest public offerings in Africa and a landmark transaction for Nigeria’s capital market.

The proposed IPO is expected to raise about $1.5 billion from investors, based on the planned sale of 4.1 billion shares at N525 per share.

Reuters had earlier reported the proposed pricing on Friday, citing two people familiar with the transaction who spoke on condition of anonymity because the terms of the offering had not been made public at the time.

According to the sources, Dangote Group is targeting September 14 for the opening of the order book, although the company had previously declined to comment on the proposed terms of the transaction.

The latest development follows comments by Aliko Dangote, President of the Dangote Group, that the IPO was expected to open within 10 to 12 days.

The sources said the proposed offer would involve 4.1 billion shares, although they did not disclose the percentage stake in the Lagos-based refinery that the shares would represent.

The transaction is also expected to include a 15 per cent greenshoe option, which would give the company the flexibility to sell additional shares if demand from investors exceeds the number of shares initially offered.

A greenshoe option could therefore enable Dangote Refinery to raise more than the initial $1.5 billion target, depending on investor demand and the final number of additional shares sold.

The IPO represents a major step in Dangote Group’s plans to deepen public ownership of one of its most strategically important assets while providing investors with an opportunity to participate directly in the refinery’s growth.

The Dangote Petroleum Refinery, located in Lekki, Lagos, currently has a processing capacity of 650,000 barrels per day. The company plans to increase the capacity to 1.4 million barrels per day, more than doubling its current capacity.

The proposed fundraising is expected to support the expansion programme as the refinery seeks to increase production capacity and strengthen its position in the domestic and international petroleum products market.

The refinery is one of the largest single-train refineries in the world and has been positioned as a major component of Nigeria’s drive to reduce dependence on imported refined petroleum products.

Its planned expansion comes as the company seeks to take advantage of growing demand for refined petroleum products in Nigeria and across the African market.

For the Nigerian capital market, the proposed IPO is significant because of its potential size and the profile of the company involved. A successful offering would bring one of the country’s most prominent industrial assets closer to a broader base of investors and could substantially increase activity on the Nigerian Exchange.

At N525 per share, the initial 4.1 billion shares translate into gross proceeds of approximately N2.15 trillion before taking account of transaction costs ainto nd any additional shares sold under the greenshoe option.

The offering is therefore expected to attract considerable attention from institutional and retail investors, particularly given the refinery’s scale, strategic importance and expansion plans.

The transaction could also provide a major test of investor appetite for large-scale Nigerian equity offerings at a time when the domestic capital market is seeking to attract more companies and deepen its capacity to mobilise long-term capital.

With SEC approval now secured, market attention is expected to shift to the formal opening of the offer, the detailed terms of the transaction and the level of demand from investors.