Aliko Dangote's $5 billion refinery IPO will list in Nigeria alone for at least three years

Dangote Petroleum Refinery has designed its October share sale around Nigerian retail investors rather than international institutions, and will not seek a foreign listing for at least three years, its chief executive said.

The company has applied to Nigeria's Securities and Exchange Commission for an offering that could raise $5 billion, according to a person familiar with the matter, though the final size has not been settled. An offer at that level would be the largest initial public offering in African history.

"We really want to drive participation," David Bird, the refinery's chief executive, told Reuters. "The mandate of the IPO was to be the people's IPO."

Bird declined to comment on the size of the offering or on the refinery's valuation.

The decision to hold off on an overseas listing sets a firm timetable against speculation that has surrounded the company for months. Bird said Dangote wants at least three years of proven production and financial performance before pursuing a foreign venue, an interval intended to support a stronger valuation when it does. Market participants have named London as a likely destination.

Other exchanges have been positioning for the business. The Johannesburg Stock Exchange said this month that Aliko Dangote had shown strong intent to list in South Africa following the Nigerian offering, and exchanges in Kenya, Egypt, Ghana and Rwanda have all been mentioned as candidates.

The refinery arrives at the market with unusually strong recent trading. Disruption tied to the Iran war pushed European buyers toward alternative supply, and the plant has been selling jet fuel across Africa and into western Europe as a result. Bird said it became Europe's largest jet fuel supplier during June and July.

The facility already supplies most of Nigeria's gasoline and diesel demand and all of the country's jet fuel requirement, in a market that spent decades importing refined products despite producing crude.

Investor appetite has held up through preparation. Bird said pre-marketing and the private placement completed in July both drew strong interest, and that work on the offering remains on schedule.

Africa Finance Corporation said on Thursday that it had led a group of strategic investors into that private placement, which closed 3.7 times subscribed with demand from African and international institutions. Bird said the refinery compares favourably with United States refining assets.

The primary listing will be on the Nigerian Exchange. Dangote has assembled a syndicate to run the transaction, with Stanbic IBTC Capital handling international placements and investor relations, Vetiva Capital Management managing retail distribution inside Nigeria, and FirstCap coordinating institutional placements with a focus on pension funds. Nigerian retail investors will apply mainly through Vetiva's channels and through platforms integrated with the exchange's subscription process.

The 650,000 barrel-a-day plant at Ibeju-Lekki in Lagos cost roughly $20 billion to build and took close to a decade, running well over its original budget and timeline. It is the largest single-train refinery in the world.

Dangote has been expanding on several fronts while preparing the listing. He told Business Daily this week that he will fund a proposed $16 billion refinery at Lamu in Kenya with 70 percent debt and 30 percent equity, and that the plant cannot compete with imported fuel unless the Kenyan government protects it from cheap refined products from countries including Russia and India. That facility would process about 700,000 barrels a day, exceeding the Lagos plant, and construction is expected to start by October.

Forbes put Dangote's net worth at $28.5 billion in March, an increase of $4.6 billion over the year, keeping him Africa's wealthiest person for a fifteenth consecutive year. His fortune rests on cement, sugar, fertiliser and refining, and the Bloomberg Billionaires Index had him at $36.7 billion by June.

The refinery IPO will test whether Nigerian retail investors have the capacity to absorb an offering of this scale. The Nigerian Exchange has run strongly this year, with the banking index up 68 percent and combined market capitalisation across listed lenders reaching ₦27.4 trillion at the end of July.