Dangote Refinery Sets Minimum IPO Subscription at N5,250

Aliko Dangote, chief executive officer (CEO), Dangote Group, has said that  the Dangote Petroleum Refinery and Petrochemicals FZE proposed initial public offering (IPO) will have a minimum subscription requirement of 10 ordinary shares, culminating in N5,250.

Dangote spoke during a signing ceremony in Lagos on Monday.

He said the refinery IPO comprised an offer of 4.1 billion ordinary shares, each with a nominal value of $0.000013, at an offer price of N525 per share.

“In this IPO, we intend to raise just a bit more than N2 trillion, which I’m sure is too small, at an offer price of N525 naira, with a minimum subscription of only 10 shares to fund our expansion of the refinery,” he said.

He explained that the minimum subscription of the offer is 10 ordinary shares, translating to N5,250.

He said the fund was not only intended to finance the expansion of the refinery but also to ensure that the majority of “drivers, our cooks, our servants, our managers, and everybody” would have an opportunity to own a stake in the offer.

Dangote added that the offering was designed to allow subscribers to build their future savings through the investment.

The CEO described the offering as “the IPO for the people”.

Lagos-based Vetiva Advisory Services Limited is coordinating the capital raise.

The ceremony follows a key approval by the capital market regulator, the Securities and Exchange Commission (SEC), last week, with 4.1 billion shares up for subscription at N525 ($0.40) per unit.

The maiden share offer values the refinery at nearly $50 billion, and plans to plough the proceeds into doubling the current capacity of the facility, which lies on a 6,180-acre expanse on the outskirts of Lagos, to 1.4 million bpd.

That could lift the market capitalisation of the Nigerian Exchange by more than one third when the shares are listed on the local bourse later this year.

A cross-border listing on the Johannesburg Stock Exchange, the continent’s biggest bourse, is in the works, just as the company is giving thought to quoting the stock in Egypt, Kenya, Ghana and Rwanda.

In July, a private placement heralding the IPO raised $2.5 billion from institutional investors and HNIs, oversubscribed by 270 per cent.

Unmet demand from the private share sale could find its way into the IPO, which, long before its approval was announced, had drawn vast interest across Nigeria, where the SEC was impelled in June to stop all the marketing related to the share sale.

The regulator’s action followed reports that many retail investors, including those with little or no knowledge of how equity investment works, were already opening trading accounts ahead of the IPO.

Nevertheless, investor appetite is growing fast beyond retail level, with Abu Dhabi National Oil Co (ADNOC) which according to Bloomberg on Monday, was said to have opened conversations with the refinery towards buying a stake in it.

The global media outlet, citing interviews with sources, noted that an insider at ADNOC said Dangote Refinery has also received approaches from other big investors.

The IPO’s launch on 14 September will ride on the improved liquidity Nigeria expects to attract from foreign portfolio capital, following the country’s restoration to frontier market status by FTSE Russell after a near-three-year downgrade that bogged it down under unclassified market status, consequently deterring international investors.

In June, the refinery, which commenced production in January 2024, toppled the US to become the biggest external supplier of jet fuel to Europe, maintaining the feat in July.