Aliko Dangote, Africa's richest man, stated that the initial public offering (IPO) for his Dangote refinery will commence within the next 10 to 12 days. This announcement was made during a visit to Botswana to investors and analysts, as reported by Reuters. The IPO seeks to raise around $5 billion, which could make it the largest IPO in Africa's history. The proceeds are intended to fund the expansion of the refinery's capacity from its current 650,000 barrels per day to 1.4 million barrels per day.
The refinery, which reached full nameplate capacity in February and has tested output at 700,000 barrels per day, began operations in 2024. Sources familiar with the plan indicate that the IPO's target is $5 billion, though the final amount depends on Nigerian regulatory approval, as the primary listing will be on the Nigerian Stock Exchange. The company has already submitted its IPO application to Nigeria's Securities and Exchange Commission, with a prospectus expected in September. Additionally, investors have committed $400 million, an underwriting commitment from Marob Strategies and Consulting DIFC Ltd. and Lilium Capital Group, which are co-financial advisers to the refinery.
This $400 million commitment follows a $2.5 billion private placement in July for a 6% stake, which valued the business at around $40 billion. This valuation has been noted as ambitious when compared to other standalone refineries, such as Turkey's Tupras, which has similar capacity across four refineries and a market value of $12 billion, or HF Sinclair, with 678,000 barrels per day capacity and a $16 billion market capitalization. While a cross-listing in other regional markets is not planned at this stage, other African capital markets are encouraged to participate through structured solutions like global depositary receipts or exchange-traded instruments.
Dangote aims for the IPO to be a pan-African venture, reflecting his vision of local solutions for the continent's development. Investors will have the option to be paid in either Nigerian Naira or U.S. Dollars. The Dangote Group does not disclose refinery margins, but the industry has seen stronger profits due to increased demand for alternative fuel supplies, partly driven by turmoil in the Middle East. Nigeria's state oil firm NNPC holds just over a 7% stake in the refinery, which cost approximately $20 billion to build.
