KEY POINTS
- East African IPO offer could raise $300.4m.
- About 729 million GDRs will be offered.
- Kenya, Uganda have cleared investor access.
Dangote Petroleum Refinery and Petrochemicals FZE has opened part of its planned initial public offering to investors in East Africa, with the regional offer expected to raise up to $300.4 million.
The offer represents nearly 20% of the refinery’s broader IPO target of at least $1.6 billion and gives eligible investors in Kenya and Uganda an opportunity to participate through a Global Depositary Receipt structure.
The development follows regulatory approvals in both countries and expands the refinery’s efforts to attract investment from across the region. According to an information memorandum released on Wednesday, Dangote Refinery plans to raise about 39 billion Kenyan shillings, equivalent to $300.4 million, through the sale of about 729 million GDRs.
Each GDR is priced at 53.50 Kenyan shillings and represents one underlying share in Dangote Petroleum Refinery and Petrochemicals FZE.
The GDRs are intended to give eligible investors in East Africa access to the Nigerian refinery’s IPO through their domestic capital markets.
The application list is scheduled to close on October 13, with allotments expected around November 12. The GDRs are expected to be listed on the Nairobi Securities Exchange 15 business days after allotment.
The minimum subscription is 2,000 GDRs, followed by additional subscriptions in multiples of 100. The minimum success threshold for the offer is 50 million shillings.
Kenya and Uganda approve access
Kenya’s Capital Markets Authority approved the GDR structure on Monday, clearing the way for eligible Kenyan investors to participate in the refinery’s share sale through negotiable certificates representing shares in the Nigerian company.
Uganda’s Capital Markets Authority has also authorised the promotion and distribution of the IPO to eligible investors in the country.
Kenya’s regulator requires Dangote Petroleum to maintain a minimum public free float of 15% of the total issued GDR pool among investors in the country.
The Kenyan offer is being jointly advised by Renaissance Capital (Kenya) Ltd. and Lagos-based Renaissance Capital Africa, while Stanbic Bank is acting as custodian and receiving bank. The East African IPO offer comes as Dangote Group deepens its investment interests across the region.
The company broke ground on September 30 for a proposed refinery in Kenya, which is designed to replicate the Dangote refinery facility in Lagos.
The proposed Kenyan refinery is expected to cost about $17 billion and take roughly five years to complete.
Dangote has also offered East African countries a combined 30% equity stake in the planned refinery. The proposed regional participation could provide access to about $1.5 billion worth of equity in the project.
David Ndii, economic adviser to Kenyan President William Ruto, said Kenya would take a 10% stake, while Ethiopia and Rwanda had also expressed interest. The East African offer adds another layer to Dangote Refinery’s wider IPO plans in Nigeria, as the company seeks to attract a broad pool of investors.
In Nigeria, the Aliko Dangote Foundation has introduced a Share Grant Initiative that could allow eligible tertiary students applying for the refinery’s IPO to receive an additional 10 shares at no cost.
The move is expected to broaden participation in the share sale and give more Nigerians an opportunity to become shareholders in the refinery.
The expansion of the IPO to East African investors also places the refinery at the centre of a broader regional investment strategy, linking its Nigerian operations with proposed energy investments across East Africa.
