Aliko Dangote's sugar firm opens a $324 million rights issue to bankroll local production

Aliko Dangote is asking shareholders to help bankroll his next big bet on Nigerian sugar. Dangote Sugar Refinery, part of the billionaire's industrial empire, has opened a N485.88 billion ($324 million) rights issue to shore up its balance sheet and accelerate a long-running push to produce more sugar at home.

The company is offering 8.1 billion new ordinary shares at N60 ($0.04) each, on the basis of two new shares for every three already held. The offer opened on May 25 and runs until June 24, with the qualification date set at April 20. Shareholders cleared the raise at the company's 20th annual general meeting, subject to regulatory approvals.

Chairman Arnold Ekpe framed the capital call as a platform for growth. "With shareholder backing for the rights issue, we are in a strong position to bolster our balance sheet, setting the stage for future growth and profitability," he said. The proceeds, he added, will feed the company's backward-integration program, branded "Sugar for Nigeria."

That strategy sits at the heart of the plan. Ekpe said the initiative aims to cut the country's reliance on imported sugar, reduce its exposure to foreign-exchange swings, create jobs and support local farmers through an out-grower scheme. Therefore, the raise reads less as routine financing and more as a down payment on self-sufficiency.

The targets are ambitious. The company wants to produce 1.5 million metric tons of sugar a year from domestically grown cane, a goal that requires developing roughly 45,000 hectares of farmland. Ekpe said about 2.7 million tons of cane are earmarked for Numan and 3.35 million tons for Nasarawa, the two estates anchoring the expansion.

Reaching that scale will not come cheap. Ekpe acknowledged the company needs substantial investment in land development and production infrastructure over the next five years, a build-out that the rights issue is designed to help fund alongside other sources.

Analysts said the offer ranks among the largest equity raises seen on the Nigerian Exchange in recent years, a signal of how aggressively Dangote intends to expand. Meanwhile, they noted that the pricing and the company's market position could draw strong participation from investors betting on long-term growth.

The move fits a familiar pattern for Dangote. The industrialist has repeatedly leaned on scale and local processing to dominate Nigerian markets, from cement to refining, and sugar now sits squarely in that playbook as he chases another domestic stronghold.