The Dangote Petroleum Refinery has initiated a significant investment opportunity by opening nearly $300.4 million, or approximately 20 percent, of its total $1.6 billion initial public offering (IPO) to investors in East Africa. This move aims to enhance regional ownership of Africa’s largest refinery.
This development follows the receipt of regulatory approvals from Kenya and Uganda, permitting eligible investors in these countries to engage in the share sale. The structure of the East African portion of the offer involves Global Depositary Receipts (GDRs), set to be listed on the Nairobi Securities Exchange.
An information release indicates that the regional offer consists of about 729 million GDRs priced at 53.50 Kenyan shillings each, with the potential to generate around 39 billion Kenyan shillings, approximately $300.4 million, upon full subscription. Each GDR corresponds to one underlying share in Dangote Petroleum Refinery and Petrochemicals FZE.
This East African offering is part of a broader IPO initiative launched by Aliko Dangote in September, aimed at raising funds to increase the refinery’s capacity from 700,000 barrels per day to 1.4 million barrels per day. Branded a “people’s IPO,” it is expected to be the largest in Africa, expanding the refinery’s ownership beyond Nigeria.
The Capital Markets Authorities in both Uganda and Kenya have approved participation for investors from their respective countries. Uganda’s authority confirmed its support for investors engaging in the IPO securities, while Kenya mandated a public free float of at least 15 percent of the total issued GDR pool for local investors.
The GDR offer is set to close on October 13, with anticipated allotments scheduled for November 12, and a listing to occur 15 business days after the allotment. Investors can subscribe for a minimum of 2,000 GDRs, followed by additional purchases in multiples of 100. A minimum threshold of 50 million Kenyan shillings is required for the offer to be successful.
Financial institutions Renaissance Capital (Kenya) Limited and Renaissance Capital Africa are advising on the Kenyan offering, while Stanbic Bank acts as the custodian and receiving bank.
This IPO comes as the Dangote Group simultaneously advances plans to establish a similar refinery project in Kenya, with a proposed investment of about $17 billion. At a recent groundbreaking event, Dangote invited East African countries to acquire a combined 30 percent equity stake in the upcoming facility, which is projected to take approximately five years to complete, potentially allowing East African investors access to about $1.5 billion in equity.
