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Nigerian billionaire Aliko Dangote has admitted that his refinery’s $1.6 billion initial public offering fell short of its goal of attracting 10 million investors, even though orders came in at roughly three times the amount on offer.
Dangote made the admission at the 25th annual conference of WIMBIZ, the women in business network, in Lagos. He blamed the shortfall on the limited time investors had to subscribe and on the difficulty many Nigerians faced in accessing the offer.
“We didn’t hit the 10 million because of time constraint, and a lot of people, they didn’t know how to access,” Dangote said, according to BusinessDay.
He added that the final investor count has not yet been officially determined, but said participation still ran into the millions. Reuters reported earlier that more than two million investors subscribed through digital channels before the offer closed.
The shortfall is notable because broad ownership was central to the sale. Dangote Petroleum Refinery branded the deal “The People’s IPO” and set the minimum purchase at just 10 shares, or N5,250 ($3.90), to draw in ordinary Nigerians rather than only institutions and wealthy investors.
Billionaires.Africa reported in September that Dangote had set the 10 million target when the offer opened, saying he wanted the refinery to be owned by as many Africans as possible.
Demand, however, was never the problem. The refinery offered 4.1 billion shares at N525 each, seeking about N2.15 trillion ($1.6 billion). Orders reached roughly N6.4 trillion ($4.75 billion) by the time the offer closed on Oct. 27, after the Securities and Exchange Commission approved a two-week extension.
Dangote also compared the turnout with other large listings. He cited about 200,000 investors in GTBank’s public offer, fewer than 900,000 shareholders in Safaricom’s Kenyan listing and about five million in Saudi Aramco’s IPO. Those figures are his own estimates and have not been independently verified.
Meanwhile, attention is shifting to how shares will be shared out. The refinery is expected to submit its allotment basis to the SEC around Nov. 10, with trading on the Nigerian Exchange expected in early December. No official allotment result or investor count has been published.
The listing will reduce Dangote’s stake in the refinery from 87.3% to about 84.4%, Billionaires.Africa reported on Sunday, valuing the company at about $47.8 billion at the offer price.
The refinery, which processes about 650,000 barrels of crude a day, is the centerpiece of Dangote’s fortune, which Forbes puts at $55.4 billion.
As a result, even without hitting 10 million investors, the offer stands as one of the largest retail share sales in African history.
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