Dangote Petroleum Refinery is preparing to open its ownership to a broader pool of Nigerian investors through a planned October initial public offering with Chief Executive Officer David Bird describing the transaction as a “people’s IPO.”
The proposed listing could become the largest public offering ever undertaken in Africa and represents a major step in the evolution of the 650,000-barrel-per-day refinery from a privately controlled industrial project into a publicly traded business.
The refinery has submitted an application to Nigeria’s Securities and Exchange Commission for an offering targeting as much as $5 billion, although the eventual size of the transaction has yet to be determined.
Bird said the objective extends beyond raising capital, with the company seeking significant participation from Nigerians as the refinery enters its next phase of development.
Preparations for the transaction remain on schedule for October, while early engagement with prospective investors has generated strong interest.
The planned public offer follows a $2.5 billion private placement completed in July, which provided an indication of investor appetite ahead of the listing. That transaction implied a valuation of approximately $40 billion for the refinery.
Africa Finance Corporation led a group of strategic investors participating in the private placement. Demand substantially exceeded the shares available with the transaction receiving subscriptions equivalent to about 3.7 times the amount offered.
The refinery is not planning an immediate listing outside Nigeria despite interest surrounding the possibility of its shares eventually trading on another international exchange.
Management wants the business to establish at least three years of operating and financial performance before pursuing an overseas listing, a track record that could help the company command a stronger valuation when it eventually approaches international capital markets.
London has been discussed as one possible destination, while the Johannesburg Stock Exchange has separately expressed interest in a future listing following the Nigerian transaction.
The October IPO is also expected to contribute to financing an ambitious expansion of the refinery.
Dangote plans to increase processing capacity to 1.4 million barrels per day within three years, more than doubling the facility’s existing 650,000-barrel-per-day capacity.
Funding for the expansion is expected to come from a combination of proceeds from the public offering and debt financing.
The refinery, which required approximately $20 billion to develop, has become increasingly important to fuel supply within Nigeria and international petroleum-product markets.
It currently meets most of Nigeria’s petrol and diesel requirements and supplies the country’s jet fuel demand.
Its international footprint has also expanded amid disruption to global petroleum flows arising from the Middle East conflict.
The refinery emerged as Europe’s largest supplier of jet fuel during June and July as buyers sought alternative sources of refined products.
For Nigeria’s capital market, a successful Dangote Refinery listing would represent one of the most consequential additions to the Nigerian Exchange in years.
A multi-billion-dollar offering would significantly deepen the market while giving retail and institutional investors direct exposure to one of Africa’s largest energy infrastructure assets.
The combination of domestic ownership, fresh capital and planned capacity expansion means the October transaction could ultimately prove significant beyond its potential record size, particularly if Dangote succeeds in attracting the broad Nigerian participation envisioned for the “people’s IPO.”
