Dangote refinery prepares major IPO to fund expansion

Nigeria’s Dangote Refinery is preparing for an initial public offering (IPO) that could become Africa’s largest-ever share sale. The refinery, owned by Aliko Dangote, Africa’s richest man, aims to raise approximately $1.6 billion through the offering. The Nigerian Securities and Exchange Commission (SEC) has approved the sale of 4.1 billion shares, priced at 525 naira each. The IPO order book is expected to open on September 14, following the formal signing of the listing documents on Monday. The funds raised from the IPO will be used to finance plans to increase the refinery’s production capacity from 650,000 barrels per day to 1.4 million barrels per day. This expansion could make the facility the world’s largest refinery. Built at a cost of around $20 billion, the Lekki-based refinery reached full capacity earlier this year and has become a major supplier of refined petroleum products in Nigeria and international markets. The refinery, located on a 6,180-acre site on the outskirts of Lagos, began operations in 2024 and has since played a crucial role in Nigeria’s energy sector. It has benefited from supply disruptions linked to the Iran war, exporting jet fuel across Africa and into Europe. The IPO is part of a larger $5 billion fundraising effort, with half of the required capital already secured through a private placement that raised $2.5 billion in July. The offering will run from September 14 to October 13, according to a presentation at a ceremony in Lagos. The company plans to sell 4.1 billion ordinary shares, potentially raising about 2.15 trillion naira if fully subscribed. In the event of over-subscription, the refinery may issue up to 30% more shares than the base offer size, subject to regulatory approval. The IPO is designed to bring more investors into one of Africa’s most ambitious industrial projects. Aliko Dangote emphasized during the signing ceremony that the initiative is not solely about raising capital but also about involving ordinary Africans in the project. He compared his vision to that of U.S. tech giant Amazon, aiming to create long-term value for shareholders across the continent. The SEC approved the IPO last week, officially kicking off what is expected to be a landmark moment for Nigeria’s capital markets. The listing will test investor appetite for a project that has positioned Nigeria as a major beneficiary of supply disruptions in the global oil market. The SEC registered the refinery company’s existing 120.13 billion ordinary shares, suggesting a valuation of around $47 billion. The refinery is part of the sprawling business empire of Aliko Dangote, who built his fortune in cement and also owns sugar and other businesses. The IPO aims to raise funds for a planned doubling of the refinery’s capacity to 1.4 million barrels per day. The company has already secured a $400-million underwriting commitment. The Dangote Group has also announced plans to list its cement subsidiary in London and is considering starting another refinery project in Kenya. Abu Dhabi National Oil Company (ADNOC) is reportedly in talks to take an ownership stake in the group’s refineries, according to Bloomberg. The IPO is expected to significantly broaden investor participation in one of Nigeria’s most transformative industrial ventures. The refinery’s expansion plans aim to make it the world’s largest single-train refinery by 2028. Additionally, the company is exploring cross-border listings on the Johannesburg Stock Exchange and potential listings in Egypt, Kenya, Ghana, and Rwanda. The IPO is tailored to encourage participation by small investors, including those with lower incomes. The minimum subscription is 10 ordinary shares, translating to 5,250 naira. The refinery’s success could lift the market capitalization of the Nigerian Exchange by more than one-third when the shares are listed later this year.