Nigerian billionaire Aliko Dangote's refinery IPO opens to wealthy Ethiopian investors only

Ethiopia will allow investors to take part in the $1.6 billion share sale of Nigerian billionaire Aliko Dangote's oil refinery, but only up to 100 qualified buyers such as institutions and wealthy individuals, shutting out the country's retail savers.

The Ethiopian Capital Market Authority, the country's securities regulator, said in a public notice on Tuesday that participation in the initial public offering of Dangote Petroleum Refinery & Petrochemicals FZE is "restricted exclusively to qualified investors," according to Ethiopian business newspaper Capital. The offer "does not constitute an offer to the general public," the regulator said.

The cap of 100 investors can be raised only with the authority's prior approval, Ethiopian financial news site Birr Metrics reported. The regulator defines qualified investors as "institutional investors, high-net-worth individuals and other categories recognised by the Authority," the site said.

Strict rules on marketing

Brokers, agents and other intermediaries must "verify and document the qualified-investor status of prospective buyers" before letting them invest, the regulator said, according to Birr Metrics. Any advertisement needs the authority's approval in advance, mass marketing is banned, and offering documents must state that the shares are unavailable to the general public in Ethiopia.

The authority said its permission should not be read as an endorsement of the company or the shares. It urged investors to read the offering documents, assess the risks themselves and deal only with firms licensed in Ethiopia. Unauthorized sales could break the country's capital market laws, it warned.

The notice did not set a minimum investment for Ethiopian buyers or say how many shares are set aside for them. It also did not explain how investors would get foreign exchange, settle their purchases or send dividends and sale proceeds home, according to Birr Metrics.

A pan-African share sale

Dangote's refinery, which cost about $20 billion to build and sits in the Lekki Free Zone outside Lagos, is selling 4.1 billion shares at 525 naira ($0.39) each. That would raise about 2.15 trillion naira ($1.6 billion) if fully subscribed, and as much as $2.1 billion if an over-allotment option is used. The offer opened on Sept. 14 and was due to close on Oct. 13, but Nigeria's Securities and Exchange Commission has approved an extension to Oct. 27.

"We will extend the closing date because we want more of our African brothers and sisters to participate," Dangote said, according to Nigerian newspaper BusinessDay.

Ethiopia is the latest market outside Nigeria to open a route into the sale. Kenya's Capital Markets Authority this month approved a plan for Kenyans to invest through global depositary receipts, certificates that each represent one refinery share and are to be listed on the Nairobi Securities Exchange. That tranche, arranged by Renaissance Capital, seeks about 39 billion Kenyan shillings ($300.4 million) through roughly 729 million receipts priced at 53.50 shillings each, with a minimum subscription of 2,000 receipts, Nigerian financial news site Nairametrics reported. Uganda's regulator has also authorized the offer's promotion there.

The sale is a key step in Dangote's plan to bring ordinary Africans into the 650,000-barrel-a-day refinery, Africa's largest, which began production in early 2024. In Nigeria, investors can buy as few as 10 shares, or 5,250 naira ($3.94).

Dangote, 69, is Africa's richest person, with a net worth of $51.7 billion, according to Forbes. Forbes has credited the refinery's opening with doubling his fortune.