Kenya’s Capital Markets Authority (KCMA) has approved a Global Depository Receipt (GDR) route that will allow eligible investors in the country to invest in the Dangote Petroleum Refinery and Petrochemicals Company’s IPO.
In a statement issued by the country’s capital market regulator on Monday, approval was given to a Short Form Prospectus submitted by Renaissance Capital (Kenya) Limited for the GDR arrangement.
The approval was sequel to Kenyan investors were trying to explore a structure that would allow them to access the Nigerian refinery’s IPO through the Nairobi Securities Exchange (NSE).
The CMA stated that its GDR approval would enable eligible Kenyan investors to participate in the Dangote Refinery IPO through GDR, which are negotiable certificates issued by a depository bank to represent shares in a foreign company.
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It clarified: “The Capital Markets Authority (CMA) has approved a Short Form Prospectus for a global depository receipt (GDR) submitted by Renaissance Capital (Kenya) Limited, a licensed investment bank, enabling eligible Kenyan investors to participate in the Initial Public Offering (IPO) of Dangote Petroleum Refinery & Petrochemicals (DPRP).”
According to the regulatory approval, under the arrangement, Renaissance Capital Kenya will put in place appropriate custodial arrangements for funds received from investors through its collaborative arrangement with the Renaissance Capital Africa, which is licensed in Nigeria.
Once the IPO closes and the allocation of Dangote Refinery shares is confirmed, Renaissance Capital Kenya is expected to structure the GDRs for listing on the Nigerian Stock Exchange (NSE), subject to obtaining the necessary approvals from Nigeria’s Securities and Exchange Commission (SEC).
The CMA cautioned investors that its approval of the Short Form Prospectus should not be interpreted as a recommendation to invest in the IPO and advised prospective investors to read the prospectus carefully and seek independent professional investment advice before investing in the Dangote Refinery’s IPO.
