Dangote Petroleum Refinery is opening nearly $300 million of its $1.6 billion initial public offering (IPO) to investors in East Africa, as Uganda becomes the latest country to approve access to the share sale.
Uganda’s Capital Markets Authority (CMA) approved the marketing and distribution of the Dangote Refinery IPO to eligible investors in the country on October 6, following a similar approval from Kenya.
The East African portion of the offer could raise up to $300.4 million if fully subscribed, representing nearly 20% of Dangote Refinery’s broader IPO target of at least $1.6 billion.
The offer is being made through Global Depositary Receipts (GDRs), which allow investors to gain exposure to shares in the Nigerian refinery through securities that can be traded on a local stock exchange.
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East Africa gets a $300m share of the IPO
Dangote Refinery is offering about 729 million GDRs to East African investors at 53.50 Kenyan shillings each.
If fully subscribed, the offer would raise about 39 billion Kenyan shillings, equivalent to $300.4 million.
Each GDR represents one underlying share in Dangote Petroleum Refinery & Petrochemicals FZE, with the securities expected to be listed on the Nairobi Securities Exchange.
“The GDR offer is intended to provide investors within East Africa region with access to the Dangote Petroleum IPO,” the information memorandum said. “Application has been made to list the GDRs on the Nairobi Securities Exchange.”
The minimum subscription is 2,000 GDRs, followed by additional subscriptions in multiples of 100.
The application window closes on October 13, while allotments are expected around November 12. Listing is scheduled to follow 15 business days after allotment.
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Uganda restricts who can participate
While Uganda has now opened a route into the IPO, the approval does not mean the offer is available to every investor in the country.
Uganda’s CMA has restricted the marketing and distribution of the offer to high-net-worth individuals and professional investors. SBG Securities Uganda is currently the authorised intermediary for the offer, while other licensed firms would need regulatory approval before participating.
Kenya had already approved a similar route, allowing eligible Kenyan investors to participate through GDRs representing shares in the Nigerian refinery.
The two approvals give Dangote access to a wider pool of African investors as it seeks to raise at least $1.6 billion through the IPO.
The IPO is funding Dangote Refinery’s expansion
The broader IPO involves 4.1 billion shares priced at ₦525 each and is scheduled to close on October 13.
Dangote Refinery plans to use the funds to support the expansion of its Lagos facility, which currently has a refining capacity of about 700,000 barrels per day.
The company plans to double that capacity to 1.4 million barrels per day as it expands the refinery’s operations.
The East African offer is separate from Dangote’s planned refinery project in Kenya. That proposed facility, located in Lamu, is a separate project expected to cost about $17 billion.
Dangote has also offered East African countries a combined 30% equity stake in the planned Kenyan refinery, with Kenya, Ethiopia and Rwanda expressing interest in the project.