Dangote Refinery Offers Almost 20% of IPO Shares to East Africa

Dangote Petroleum Refinery & Petrochemicals FZE, which owns Africa's largest oil refinery in Nigeria, has offered East African investors nearly 20% of its initial public offering. The offering could raise up to $300.4 million. The company aims to raise approximately 39 billion shillings by offering around 729 million global depositary receipts (GDR) at 53.50 shillings each, according to an information memorandum published on Wednesday.

Kenya's market regulator has approved the GDR offering for eligible investors in the country. Separately, Uganda's Capital Markets Authority has allowed the promotion and distribution of the IPO among local investors. Dangote Refinery, owned by Africa's richest man Aliko Dangote, is raising at least $1.6 billion for expansion. The offering will be the largest IPO on the continent to date. If the GDRs in Kenya and Uganda are fully subscribed, they will account for nearly 20% of the IPO's target amount.

The application list closes on October 13, allocation is published around November 12, and listing is expected within 15 working days thereafter. The joint lead advisors for the deal are Renaissance Capital (Kenya) Ltd and Renaissance Capital Africa from Lagos. Stanbic Bank, the Nairobi unit of Standard Bank Group, acts as the custodian and receiving bank. The minimum success threshold for the GDR is 50 million shillings. The smallest minimum subscription is 2,000 GDRs, in multiples of 100 thereafter, with each receipt representing one underlying share of the company. The GDR is planned to be listed on the Nairobi Securities Exchange. The IPO is expected to value Dangote Refinery at nearly $50 billion. Kenya's regulator requires Dangote Petroleum to maintain a minimum public free-float of 15% of the total pool of issued GDRs among investors in the country.