Dangote Petroleum Refinery has secured a $1 billion underwriting programme to support its planned initial public offering (IPO), which could become one of Africa’s largest.
The underwriting programme, announced on Tuesday August 18 by financial advisers Marob Strategies and Consulting DIFC Ltd and Lilium Capital Group, comprises a completed and funded $600 million private placement and a further $400 million commitment for the proposed IPO.
The $400 million underwriting commitment will become effective when the IPO is launched, subject to market conditions and regulatory approval.
The refinery has also submitted an application to the Securities and Exchange Commission (SEC) for a proposed $5 billion IPO, although the final size of the offer has not been determined.
The proposed listing is expected to provide investors with an opportunity to acquire shares in the 650,000-barrel-per-day refinery owned by Aliko Dangote.
The refinery has become a major supplier of petroleum products to African and international markets, including jet fuel exports to Africa and Europe.
The planned IPO is expected to be one of the most significant transactions in Nigeria’s capital market, with investors closely watching the valuation, offer size and regulatory approval process.
The advisers said interest in the transaction had been strong, reflecting growing appetite among large investors for major African assets with long-term growth and cash-flow potential.
They said the transaction could also support greater movement of capital across African markets and contribute to the broader objectives of economic integration under the African Continental Free Trade Area.
President and Chief Executive Officer of Dangote Industries Limited, Aliko Dangote, described the financing as a landmark development for the refinery and African finance.
Dangote said the completed private placement and the additional underwriting commitment demonstrated investor confidence in the strategic importance of the refinery.
Although plans for an IPO have been anticipated for some time, no specific date has been announced.
The refinery’s formal application for the IPO is currently being processed by the Securities and Exchange Commission (SEC) Nigeria.
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