Aliko Dangote says his $5 billion refinery IPO opens within twelve days

Aliko Dangote said on Thursday that the initial public offering of his Lagos refinery will open within the next ten to twelve days, and that he intends to use the proceeds to double the plant's capacity.

He made the remarks to investors and analysts in Botswana, where he was visiting and met President Duma Boko. The offering is expected to seek about $5 billion, which would make it the largest ever on the continent.

The dream, he said, is to double the refinery's capacity to 1.4 million barrels a day.

The plant reached its full nameplate capacity of 650,000 barrels a day in February and has since tested output at 700,000. Nigeria's state oil company NNPC holds a 20% equity stake, separate from the shares being offered.

Dangote Petroleum Refinery and Petrochemicals filed its application with Nigeria's Securities and Exchange Commission in late July. Emomotimi Agama, the commission's director-general, confirmed receipt and said his officers were working closely with the company's advisers, adding that he saw no regulatory obstacle to a September listing. No date has been formally approved, and the primary listing will be on the Nigerian Exchange.

The private placement that preceded it closed at $2.5 billion and was 3.7 times oversubscribed, implying a valuation near $41.7 billion. Dangote said in May that private investors had offered about $2 billion but would not be permitted to take the entire stake on offer.

The company also raised $750 million in its first Eurobond sale ahead of the listing, and has ruled out any foreign listing for at least three years.

What the refinery earns from the current market is not public. Dangote does not disclose refining margins, though the industry as a whole has benefited from stronger profits as disruption in the Middle East pushed buyers toward alternative fuel supplies.

He also confirmed a second project. Dangote is planning a refinery on the Kenyan coast in partnership with East African governments, expected to take up to three years to build and intended to supply Kenya and neighbouring countries, reducing the region's dependence on imported fuel. It would be his largest refining investment outside Nigeria, and he said it launches on Sept. 30.

Anticipation has already changed behaviour in Nigerian markets, with retail and institutional investors reported to be holding cash in preparation for the offer.

Dangote owns 92.3% of the refinery. Bloomberg valued his fortune at $35.3 billion on Aug. 30, carrying the refinery at roughly its construction cost, and a market price at the level the July placement implied would add close to $20 billion to that figure.