The President of Dangote Industries Limited, Alhaji Aliko Dangote, has indicated the company management’s plan to open a cross-border public offering of $20bn of the Dangote Petroleum Refinery and Petrochemicals Company’s shares to deepen its capital base and boost its productivity on a sustainable basis in the years ahead.
Bloomberg reported on Monday that the investment move could reshape capital markets across Africa and deepen regional investor participation in the multi-billion dollar oil refinery project.
According to the news report, the proposed listing of the company’s shares on the exchanges, which will see shares of the company listed on many African stock exchanges, will be the first pan-African initial public offering of its scale.
Details of the IPO plan emerged after the richest industrialist in Africa held a high-level meeting with chief executives of many African exchanges under the aegis of the African Securities Exchanges Association (ASEN) in Lagos.
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The Chief Executive Officer of the Nairobi Securities Exchange, Frank Mwiti, who attended the meeting, was quoted as saying that discussions at the meeting focused on structuring a cross-border listing framework that would allow Sub-Saharan Africa (SSA) investors to invest in the refinery’s ownership.
Mwiti, who hinted that the plan was to structure a pan-African IPO, maintained that the initiative would require coordination among exchanges to ease regulatory barriers and facilitate seamless trading across jurisdictions.
The proposed IPO move is coming some months after Dangote unveiled plans to list about 10 per cent of the refinery’s shares on the Nigerian Exchange Group (NGX) this year.
To facilitate the listing of the shares on the local bourse, the Dangote Group President has appointed a consortium of financial advisers, including Stanbic IBTC Capital Limited, Vetiva Advisory Services Limited, and FirstCap Limited.
Currently, the Dangote Refinery is the largest single-train facility in the world with installed processing capacity of 650,000 barrels per day. However, the management of the company plans to increase the operational capacity to 1.4 million barrels per day within the next three years.
On this expansion plan, the management of the company recently secured support from the African Export-Import Bank (Afreximbank), which underwrote $2.5bn out of a $4bn syndicated financing facility.
