Africa’s richest man, Aliko Dangote, has taken a major step towards listing his $49 billion refinery business on the Nigerian Exchange, as he seeks to raise $1.6 billion from investors in what is expected to be Africa’s biggest initial public offering (IPO).

In simple terms, an IPO is when a private company offers shares of the business to the public for the first time.

Dangote Petroleum Refinery and Petrochemicals FZE will offer 4.1 billion shares at 525 naira ($0.40) each, according to the signed prospectus.

The IPO is scheduled to open on September 14 and close on October 13, with the refinery expected to be listed in November.

Dangote sets date for $5 billion refinery IPO

The deal marks a major milestone for Dangote’s $20 billion refinery, which took 11 years to build and has transformed Nigeria’s position in the petroleum market.

At the signing of the IPO documents, Dangote stressed the strategic importance of the refinery to Africa’s industrialisation and energy security.

“The refinery means too much to our continent. We can’t industrialise if we don’t have energy security,” he added.

Dangote has appointed Stanbic IBTC Capital, Vetiva Advisory Services and FirstCap as advisers for the transaction.

Vetiva Capital Management Chief Executive Officer, Chuka Eseka, said the minimum subscription would be 10 shares, while FirstCap Chief Executive Officer, Ukandu Eme Ukandu, said the IPO was targeting about 10 million retail investors.

The public offering follows a private placement that raised $2.5 billion for the refinery.

The placement was oversubscribed 3.7 times, attracting major investors including Africa Finance Corporation and African Export-Import Bank.

Proceeds from both the private placement and the IPO will support plans to double the refinery’s capacity to 1.4 million barrels per day by 2028, from its current capacity of about 700,000 barrels per day.

The refinery has already helped Nigeria shift from being a major importer of refined petroleum products to an exporter.

Its growing production capacity has also positioned the facility as an important supplier of refined petroleum products to markets across Africa.

The IPO comes as Dangote seeks to deepen local ownership of the refinery by bringing millions of retail investors into the business.

Dangote already has a strong presence on Nigeria’s capital market through publicly traded companies with interests in cement, sugar and other sectors.

The planned listing also comes amid a strong run for Nigerian equities. The country’s benchmark equities gauge has risen 73% in dollar terms this year, making it the second-best performing major equity market globally after South Korea.

The Dangote refinery IPO could therefore become a major test of investor appetite for large-scale African industrial assets, while giving retail investors an opportunity to take a direct stake in one of the continent’s most ambitious industrial projects.

With additional files from Bloomberg

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