LAGOS, Nigeria — Dangote Petroleum Refinery is moving closer to what could become Africa’s largest share sale after Nigeria’s Securities and Exchange Commission approved an initial public offering that could raise about 2.15 trillion naira, or roughly S1.6 billion, marking a major step in opening one of the continent’s biggest industrial projects to public investors.
The approved offer covers 4.1 billion ordinary shares priced at 525 naira each. The commission also registered about 120.13 billion existing shares in the refinery. Dangote Group was expected Monday to hold a signing ceremony with advisers and other stakeholders as preparations continue for the public offering.
An initial public offering, commonly called an IPO, allows a privately controlled company to sell shares to public investors for the first time. The Dangote transaction is being closely watched because of the refinery’s size and its central role in Nigeria’s attempt to reduce decades of dependence on imported gasoline and other petroleum products.
The refinery, built outside Lagos at an estimated cost of about S20 billion, has capacity to process about 650,000 barrels of crude oil a day. Aliko Dangote has said the company wants eventually to expand capacity to about 1.4 million barrels a day, a level that would strengthen its position as one of the world’s largest refining complexes.
Nigeria, despite being Africa’s largest oil producer for much of its modern history, has spent billions of dollars importing refined fuel because its government-owned refineries operated far below capacity for years. The Dangote facility has begun changing that pattern by supplying more locally refined petroleum products and positioning Nigeria as a potential exporter to other African markets.
The listing could also deepen Nigeria’s capital market by giving institutional and individual investors exposure to an asset previously controlled mainly by the Dangote Group and strategic investors. Analysts, however, are likely to scrutinize the refinery’s valuation, profitability, debt obligations, crude supply arrangements and exposure to volatile global oil prices before determining how much they are willing to pay.
The IPO comes at a time when energy security has taken on greater global importance because wars and shipping disruptions have affected crude and refined-product markets. A successful listing would therefore carry significance beyond Nigeria, potentially demonstrating that large African infrastructure and industrial projects can raise substantial capital through domestic and regional financial markets.
