Dangote Refinery Offers East Africa Almost 20% of IPO Shares

Dangote Petroleum Refinery & Petrochemicals FZE, which owns Africa’s biggest crude-processing facility in Nigeria, is offering investors based in the continent’s east an almost 20% share its initial public offering that could raise as much as $300.4 million.

The markets regulator in Kenya approved offering global depositary receipts to eligible investors in the East African nation. Separately, Uganda’s Capital Markets Authority authorized promoting and distributing the IPO to local investors, without providing information on the actual securities available for subscription.

The company aims to raise about 39 billion shillings ($300.4 million) by offering about 729 million GDRs at 53.50 shillings each, according to an information memorandum released Wednesday.

The Dangote Refinery, owned by Africa’s richest man, Aliko Dangote, is raising at least $1.6 billion for expansion, with the share sale set to be the continent’s largest IPO to date.

If fully subscribed, the IPO of the depositary receipts in Kenya and Uganda will raise almost 20% of the initial public offering’s target. The application list closes on Oct. 13, with allotments published around Nov. 12 and listing set for 15 business days after that, according to the statement.

The joint lead transaction advisers for the GDRs are Renaissance Capital (Kenya) Ltd. and Lagos-based Renaissance Capital Africa. Stanbic Bank, the Nairobi-based unit of Standard Bank Group Ltd., Africa’s biggest lender, is the custodian and receiving bank for the transaction.

“The GDR offer is intended to provide investors within East Africa region with access to the Dangote Petroleum IPO,” according to the information memorandum. “Application has been made to list the GDRs on the Nairobi Securities Exchange.”

The minimum success threshold for the GDRs is 50 million shillings.

The smallest minimum subscription is 2,000 GDRs and thereafter in multiples of 100, with each of the receipts representing one underlying share of the company, it said.

The IPO is expected to value the Dangote Refinery at nearly $50 billion and could provide a template for financing mega-projects in Africa, with the listing also encouraging collaboration between African stock exchanges.

Kenya’s markets authority said Dangote Petroleum is required to maintain a minimum public free-float of 15% of the total issued GDR pool among investors in the country.

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