Dangote Refinery opens $300 million IPO stake to East Africa

Dangote Petroleum Refinery & Petrochemicals FZE, owned by Africa’s richest man, Aliko Dangote, is offering East African investors nearly 20 percent of its planned $1.6 billion IPO, targeting up to $300.4 million. The offer follows regulatory approvals in Kenya and Uganda, allowing eligible investors to participate in the refinery’s share sale.

East Africa gets access

The refinery plans to raise about 39 billion Kenyan shillings, or $300.4 million, through the sale of approximately 729 million Global Depositary Receipts at 53.50 shillings each. If fully subscribed, the offering would represent almost one-fifth of the refinery’s broader IPO target, underscoring the importance of East African capital to the fundraising.

The information memorandum said the GDR offer is designed to give investors across East Africa access to the Dangote Petroleum IPO, with an application made to list the securities on the Nairobi Securities Exchange. Each GDR represents one underlying share in Dangote Petroleum Refinery & Petrochemicals FZE.

Investors face firm deadlines

The minimum subscription is 2,000 GDRs, followed by increments of 100, while the offer requires at least 50 million shillings to be considered successful. The application list closes Oct. 13, with allotments expected around Nov. 12. The GDRs are scheduled to list 15 business days after allotment.

Renaissance Capital (Kenya) Ltd. and Lagos-based Renaissance Capital Africa are jointly advising the Kenyan offer, while Stanbic Bank is acting as custodian and receiving bank. The structure gives investors in Kenya and other eligible East African markets a direct channel into one of Africa’s largest industrial projects.

Kenya refinery expands ambitions

The fundraising push comes as Aliko Dangote advances plans for a proposed refinery in Kenya, where groundbreaking took place Sept. 30. Designed as a replica of the company’s Lagos refinery, the facility is expected to cost about $17 billion and take roughly five years to complete, extending Dangote’s refining ambitions into East Africa.

Dangote has offered East African countries a combined 30 percent equity stake in the proposed Kenyan refinery, potentially giving regional investors access to about $1.5 billion of the planned project. David Ndii, economic adviser to Kenyan President William Ruto, said Kenya would take a 10 percent stake, while Ethiopia and Rwanda have also expressed interest.