Dangote Refinery raises $2.5 billion in Africa’s largest private equity placement

Dangote Petroleum Refinery and Petrochemicals has raised approximately $2.5 billion in fresh equity after successfully concluding a private placement that was 3.7 times oversubscribed, the company said in a statement on Thursday.

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The company described the placement as Africa’s largest publicly disclosed primary equity private placement by value, affirming that the transaction resulted in the issuance and allotment of about $2.5 billion in new equity and represents the refinery’s first capital raise involving external investors beyond its existing shareholder base.

“Dangote Petroleum Refinery and Petrochemicals FZE (“DPRP” or the “Enterprise”) today announces the successful completion of its landmark Private Placement, which achieved 3.7 times subscription relative to the initial offer size and resulted in the issuance and allotment of approximately US$2.5 billion in new equity,” the statement said.

The company said the proceeds would finance the continued expansion of its refinery and petrochemical complex, strengthen its balance sheet and provide greater financial flexibility to support future growth.

The announcement of private placement by the Refinery came about a month after Nigeria’s Securities and Exchange Commission (SEC) warned Nigerians and investors against participating in a purported initial public offering (IPO) of the Dangote Petroleum Refinery, saying no application for such an offer has been submitted to or approved by the regulator.

At the time, SEC expressed concern over the involvement of some registered capital market operators in soliciting advance subscriptions from investors for the purported offer.

According to the commission, no application for the registration of an IPO or public offer of shares by the refinery has been filed with or approved by it.

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Meanwhile, in May, Femi Otedola, the chairman and biggest shareholder of financial services group First HoldCo Plc, during a tour of the Dangote Refinery, announced that he hopes to invest $100 million in the proposed private placement of Dangote Petroleum Refinery.

“Mixed investors”

According to the company, the fresh offer attracted a broad mix of international and African institutional investors, sovereign-backed investment vehicles, development finance institutions and strategic partners.

Among the investors were the Africa Finance Corporation (AFC) and India Infra Buildco, an investment vehicle facilitated by the African Export-Import Bank (Afreximbank), alongside other institutional and individual investors, the statement said.

According to the company, the strong investor demand reflects growing confidence in its long-term growth strategy and operational performance.

Speaking on the development, the President of Dangote Industries Limited and Chairman of Dangote Petroleum Refinery, Aliko Dangote, described the transaction as an important step in broadening the company’s shareholder base while supporting its expansion plans.

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He said the capital raised would complement internally generated funds and existing external financing as the company continues to scale its operations.

Mr Dangote added that the investment reinforces the company’s commitment to expanding Africa’s refining and petrochemical capacity, reducing dependence on imported petroleum products and improving the continent’s energy security.

The Managing Director and Chief Executive Officer of Dangote Petroleum Refinery and Petrochemicals, David Bird, said the overwhelming investor interest reflected confidence in the refinery’s operational performance, execution capability and leadership.

The company said the successful fundraising has strengthened its platform for long-term value creation and positioned it to continue executing its expansion strategy.

Dangote Petroleum Refinery, which has a refining capacity of 650,000 barrels per day, is Africa’s largest refinery and has increasingly expanded supplies of refined petroleum products to Nigeria and other African markets as part of efforts to reduce the continent’s dependence on fuel imports.