Investors have committed $400 million to a planned initial public offering by Dangote Petroleum Refinery & Petrochemicals FZE. The continent’s largest crude oil processing plant is raising capital to expand the facility.
The funding is an underwriting commitment from Marob Strategies and Consulting DIFC Ltd. and Lilium Capital Group, which have been mandated as co-financial advisers to the refinery, according to a statement.
Implementation and Growth
This funding will be implemented upon the launch of the IPO, subject to market conditions, corporate and regulatory approvals, the execution of definitive documentation, and compliance with applicable securities laws. Aliko Dangote, Africa’s richest person, is looking to raise as much as $2 billion in an IPO for his 700,000 barrels-per-day refinery located on the outskirts of Lagos, Nigeria’s commercial hub, Bloomberg reported.
The offering is expected to open later this month or early September, with proceeds going toward doubling the capacity of the plant to about 1.4 million barrels per day, making it one of the largest globally. Ahead of the IPO, the refinery successfully raised $2.5 billion in a private placement that was oversubscribed.
Strong Investor Appetite
Marob Capital and Lilium Capital said they successfully funded $600 million of the private placement through an underwriting commitment and have subsequently been selling the shares to African and Caribbean sovereign wealth funds, governments, institutional investors, and other eligible investors.
”The investor response has been strong and strategically significant,” the co-advisers said, adding that it reflects demand for high-quality, globally significant industrial assets and for transactions that give African and Africa-linked capital a direct role in financing Africa’s growth platforms.
Continental and Global Significance
The Dangote refinery’s planned IPO has attracted strong interest from investors in Nigeria and from across the continent because of the relevance of the plant, which has the capacity to meet Nigeria’s fuel consumption needs and still have enough left over for exports.
It became even more significant when other nations turned to it to fill the gap after the Iran war disrupted traditional supply routes. The expansion of the plant will enhance its capacity to supply the rest of Africa.
Temiloluwa, the Online Editor of BusinessDay, is a transformative editorial leader with over 10 years of experience driving digital growth and innovation in media. He leads initiatives in leveraging technology to enhance storytelling and build high-performing teams. Temi is passionate about harnessing tech to inform, engage, and empower communities, with a demonstrated history of creating award-winning solutions that bridge the gap between media and technology.
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