Africa's richest man, Aliko Dangote, is seeking to raise $1.6 billion through an initial public offering (IPO) for his Dangote Petroleum Refinery and Petrochemicals FZE. This would be Nigeria's largest IPO and one of Africa's biggest share sales. The company plans to offer 4.1 billion ordinary shares at 525 naira ($0.40) each, aiming to generate approximately $1.63 billion if fully subscribed. Nigeria's Securities and Exchange Commission approved the sale on Friday, with the IPO scheduled to open on September 14.
The proceeds from the IPO will fund a significant expansion of the refinery's capacity. Currently, the refinery, located in Lekki, Lagos, has a capacity of 650,000 barrels per day. The expansion aims to nearly double this to 1.4 million barrels per day, which would make it larger than India's Jamnagar refinery complex and transform it into one of the world's largest refining assets. The SEC's approval values the refinery at roughly $47 billion, based on its registered share capital and the IPO price.
Analysts have raised questions regarding this valuation, noting it appears high when compared to publicly traded international refiners. For instance, Turkey’s Tupras, with comparable refining capacity across four sites, has a market value of about $12 billion, while US-listed HF Sinclair, with approximately 678,000 barrels per day capacity, is valued at about $16 billion. Despite this, Dangote is confident that the refinery's scale, growing exports, and strategic importance to Africa's energy supply will attract investors. He also aims for broad participation, including Nigerian retail investors and investors across Africa, emphasizing that the listing is an "African listing" and payouts will be in dollar terms.
The IPO follows a $2.5 billion private placement secured in July to support expansion plans. The offering includes a greenshoe option to sell an additional 15% of shares if demand exceeds the initial allocation, and a $400 million underwriting commitment is in place. A fully subscribed offer would significantly increase the size of the Nigerian Exchange and provide investors with direct exposure to a strategically important energy project. Beyond this IPO, Dangote Group is also planning a new refinery project in Kenya and a secondary London listing for Dangote Cement as part of its broader international expansion strategy.
