Billionaire Aliko Dangote is aiming to raise $1.6 billion through an initial public offering (IPO) for his company, Dangote Petroleum Refinery and Petrochemicals FZE, which operates Africa's largest oil refinery. The company plans to sell 4.1 billion shares at 525 naira ($0.40) each, and the IPO is scheduled to open on September 14. This offering, approved by Nigeria's Securities and Exchange Commission (SEC), represents what would be Nigeria's biggest IPO.
The IPO could potentially raise approximately 2.15 trillion naira ($1.63 billion) if fully subscribed. The SEC also registered the refinery company's existing 120.13 billion ordinary shares, which, at the IPO price, implies a valuation of about $47 billion. This valuation has drawn attention, as a private placement in July indicated a refinery valuation of $40 billion, and it is significantly higher than similar refining companies like Turkey's Tupras (valued around $12 billion) and New York-listed HF Sinclair (valued around $16 billion).
The funds raised from the IPO are intended to help finance an ambitious expansion plan to more than double the refinery's capacity from 650,000 barrels per day to 1.4 million barrels per day. The offering includes a greenshoe option to sell approximately 15% more shares if demand surpasses the initial offering. The refinery has secured a $400 million underwriting commitment for the IPO as part of a wider $1 billion program.
