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Nigeria's Securities and Exchange Commission has approved the Dangote refinery's initial public offering at 525 naira a share, and the sale of 4.1 billion ordinary shares could raise about 2.15 trillion naira, roughly $1.55 billion.
The approval came in a letter to Vetiva Advisory Services, the lead issuing house, signed by Abdulkadir Abbas, director of the commission's securities and investment services department. The regulator also registered the company's existing 120.13 billion ordinary shares. Aliko Dangote said on Thursday, speaking to investors in Botswana, that the offer would open within ten to twelve days, and it is expected to open on Sept. 14.
The price sits toward the lower end of the indicative range of 500 to 595 naira.
What that price implies is a company worth considerably more than investors paid two months ago. At 525 naira across an enlarged 124.23 billion shares, the refinery is valued at about 65.22 trillion naira, some $46.92 billion at 1,390 naira to the dollar. The private placement completed in July, which was 3.7 times oversubscribed at $2.5 billion, implied a valuation nearer $41.7 billion.
The offer represents about 3.3% of the enlarged company. Combined with the roughly 6% sold in the private placement, that is consistent with the group's stated intention to float between 5% and 10%.
The consequence for Dangote's fortune is substantial. He holds 92.3% of the refinery, about 110.88 billion shares, which at the offer price are worth roughly 58.21 trillion naira, or $41.88 billion. His stake dilutes to about 89.25% after the offer.
The Bloomberg Billionaires Index put his total wealth at $35.3 billion on Aug. 30, carrying the refinery at roughly its construction cost of $20 billion. Marking it at the offer price would add about $23.42 billion, taking him toward $58.7 billion and making him one of the twenty wealthiest people in the world.
Approval clears the company's draft offer documents and authorises it to hold a completion board meeting and signing ceremony.
The structure includes an unusual feature for Nigerian investors. The company has proposed allowing shareholders to buy in naira on the Nigerian Exchange while receiving dividends in dollars, funded by the refinery's export earnings from refined fuel and petrochemicals. That would give domestic buyers hard-currency income in an economy where the naira has lost substantial value.
Money has been arriving ahead of the listing regardless. The refinery raised $750 million in its first Eurobond sale and completed a $1 billion underwriting programme in August, arranged by Marob Strategies and Consulting DIFC and Lilium Capital Group.
The proceeds are earmarked for expansion. The plant reached its 650,000 barrel a day nameplate capacity in February and has tested at 700,000, and Dangote wants to take it to 1.4 million, which would make it the largest refinery in the world. He also said in Botswana that a Kenyan refinery project launches on Sept. 30.
Nigeria's entire stock market was worth roughly $116 billion in early August. The refinery alone would enter it at about 40% of that.
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