Dangote Petroleum Refinery & Petrochemicals FZE is offering East African investors nearly 20 per cent of its initial public offering (IPO), seeking to raise up to $300.4 million from the region.
The details are in an information memorandum released on Wednesday, after regulators in Kenya and Uganda cleared the way for eligible investors in both countries to take part.
How the offer works
The refinery plans to raise about 39 billion Kenyan shillings ($300.4 million) by selling roughly 729 million Global Depositary Receipts (GDRs) at 53.50 shillings each. Each GDR represents one underlying share in the company.
If fully subscribed, the East African tranche would make up almost 20 per cent of the IPO’s target of at least $1.6 billion.
The memorandum says the offer is meant to give investors in the region access to the IPO and that the company has applied to list the GDRs on the Nairobi Securities Exchange.
Key terms
- Minimum success threshold: 50 million shillings
- Minimum subscription: 2,000 GDRs, then multiples of 100
- Application deadline: October 13
- Allotment: around November 12
- Listing: 15 business days after allotment
Renaissance Capital (Kenya) Ltd. and Lagos-based Renaissance Capital Africa are jointly advising on the Kenyan offer. Stanbic Bank is the custodian and receiving bank.
Regulatory approvals
On Monday, Kenya’s Capital Markets Authority (CMA) approved the GDR structure, which lets eligible Kenyan investors buy negotiable certificates representing shares in the Nigerian company. The approval followed growing interest from Kenyan investors and market participants who wanted to invest through their domestic market.
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Uganda’s Capital Markets Authority has also authorised the promotion and distribution of the IPO in that country. Kenya’s regulator requires Dangote Petroleum to keep at least 15 per cent of the issued GDRs in public hands in Kenya.
In Nigeria, the Aliko Dangote Foundation has launched a Share Grant Initiative. Eligible tertiary students who apply for the IPO could receive 10 additional shares at no cost.
Kenya refinery plans
The offer comes as Dangote deepens his push into East Africa. Work began on September 30 on a proposed refinery in Kenya, designed as a replica of the Lagos facility. The project is expected to cost about $17 billion and take roughly five years to build.
Mr Dangote has offered East African countries a combined 30 per cent equity stake in the Kenya project, which could give regional investors access to about $1.5 billion worth of it.
David Ndii, economic adviser to Kenyan President William Ruto, said at a capital markets forum in Nairobi that Kenya would take a 10 per cent stake. He said Ethiopia and Rwanda had also shown interest.
Sunday Michael Ogwu is a Nigerian journalist and editor of Pinnacle Daily. He is known for his work in business and economic reporting. He has held editorial roles in prominent Nigerian media outlets, where he has focused on economic policy, financial markets, and developmental issues affecting Nigeria and Africa more broadly.