Dangote Refinery will Monday open the order book for its $1.6 billion initial public offering IPO (IPO), marking the kickoff of the capital-raising programme that is targeting retail investors across Africa.
The month-long share sale, which is out to sell 4.1 billion shares at N525 ($0.000013) per unit, will run through 13 October, with listing scheduled for November, according to the offer prospectus.
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Vetiva Advisory Services is the lead issuing house, with a host of joint issuing houses including First Cap, Chapel Hill Denham, Absa Capital Markets, Afrinvest Capital, Stanbic IBTC Capital, among others.
The refinery, the biggest bet of Africa’s richest man Aliko Dangote, currently at a 700,000 barrel-per-day processing capacity, is aspiring to double that size by 2030, using the proceeds of the IPO to finance the expansion.
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It plans to add ten million African retail investors, from cooks and drivers to traders and managers, to its shareholder base at the end of the transaction in a push to drive continent-wide inclusiveness, Mr Dangote told investment bankers and the investing public last week at the signing of the offer documents in Lagos.
Minimum subscription is as little as 10 units, equivalent to N5,250. The offer has a green shoe option, which allows underwriters to sell a further 30 per cent of the shares on offer in the event it is oversubscribed.
In July, a private placement heralding the IPO was 270 per cent oversubscribed even though the original plan was to raise $2.5 billion.
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Heavyweight institutional investors, including UAE’s Abu Dhabi National Oil Company, have signalled interest in the mega refinery, which is seeking to build a plant of the same scale in Lamu in coastal Kenya.
Pan-African Refinery Investment SPV, a subsidiary of Lilium Capital Group, underwrote and funded $600 million of the private placement.
The groundbreaking of that project, which is strategically conceived to serve the fuel needs of the East African region, is timed to be executed on 30 September.
Dangote Refinery reported N19.1 trillion in turnover in the first half of this year, according to its financial highlights, riding on a boom fuelled by oil price spikes from the US/Iran war, which is fast generating big windfall income for oil & gas companies worldwide.
Profit after tax for the period stood at N2.5 trillion. A cross-border listing on the Johannesburg Stock Exchange, the continent’s biggest bourse, is in the works, just as the company is considering quoting its stock in Egypt, Kenya, Ghana and Rwanda.
ALSO READ: How to buy Dangote Refinery shares through FirstMobile, FirstOnline, branch subscription as IPO opens Monday
The IPO requires a valid bank verification number for validation of applications submitted through electronic application channels.
In a push to drive inclusiveness, the shares could be bought through approved POS stations and on apps run by stockbroking firms.
Mr Dangote, whose sprawling empire encompasses cement, sugar and salt production, has repeatedly stated his bid to industrialise Africa, leveraging the potential offered by the African Continental Free Trade Area.
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