Dangote launches oil refinery ‘people’s IPO’, Africa’s biggest

Nigerian billionaire Aliko Dangote has launched Africa’s largest share sale yet with the initial public offering of ‌his oil refinery, targeting the general public to raise as much as $2.1 billion for its expansion.

Dangote, Africa’s richest man, has marketed the offer of a roughly 3% stake as a “people’s IPO,” saying it is about giving ordinary Nigerians the opportunity to participate in the success of the plant.

The refinery has benefited from increased demand for its products as a result of supply disruptions linked to the Iran ​war that helped it to sell jet fuel to Western European countries.

Dangote said on Monday the share sale aimed to “democratise wealth creation”.

However, ​retail investors will be paying a higher price than institutional investors who bought into a July private placement that raised $2.5 billion ⁠for a 6% stake.

That private placement valued the company at $40 billion, whereas the IPO moves the valuation closer to $49 billion, according to the company prospectus.

The refinery’s CEO ​David Bird told Reuters the private placement’s discount was due to certain conditions, including a lockup period, that institutional investors agreed to.

Dangote has said United Arab Emirates state oil ​company ADNOC was interested in investing in the plant alongside others but declined to elaborate, citing non-disclosure agreements.

The Africa Finance Corporation, one of the institutional investors in the private placement, said others included sovereign wealth funds and other development finance institutions.

LOW THRESHOLD FOR INVESTMENT If fully subscribed, the IPO on Nigeria’s main stock exchange would raise 2.15 trillion naira ($1.6 billion), though that could rise to roughly $2.1 billion ​if the offer is oversubscribed and the company decides to use a greenshoe option to issue more shares.

People can participate in the IPO by buying as few ​as 10 shares on fintech and other digital investment platforms, which translates into a minimum investment amount of about $4.

That is low relative to many IPOs by large companies in Nigeria.

Telecoms firm ‌MTN Nigeria’s offer to retail investors in 2021 had a minimum investment amount of about $8 according to the exchange rate at the time.

Nigerian investment app Bamboo said it was receiving much higher traffic than usual because of the Dangote refinery IPO, preventing some users from logging in.