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By Chukwuma Umeorah
Nigeria’s Dangote Petroleum Refinery is targeting a $5 billion initial public offering (IPO) expected to conclude in October as it seeks fresh capital to expand operations, according to sources familiar with the planned transaction.
According to a report by Reuters, the proposed share sale could become one of the largest equity offerings in Africa if completed. The source, however, cautioned that the final amount to be raised would depend on regulatory approvals.
It revealed that Dangote Petroleum Refinery & Petrochemicals FZE has submitted its IPO application to the Securities and Exchange Commission (SEC) and is expected to receive approval in the coming weeks, paving the way for the publication of a prospectus in September.
The primary listing is expected to be on Nigerian Exchange Limited (NGX), while investors in other African markets may participate through structured investment instruments rather than a dual listing.
The first source said “the refinery was targeting about $5 billion from the offering”, but noted that the amount could change depending on what regulators approve. Reuters reported that such a capital raise would account for just over four per cent of the Nigerian equity market, whose total capitalisation stood at about $116 billion as of Tuesday. The report added the IPO has attracted interest from several African capital markets. Stock exchanges in South Africa, Kenya, Egypt, Ghana and Rwanda have reportedly held discussions with the refinery’s advisers on possible participation in the transaction.
“Kenya’s capital market alone could mobilise as much as $500 million for the offering”, the report stated citing strong interest from institutional investors, including pension funds.
The planned fundraising is expected to finance expansion of the refinery’s operations, including increasing refining capacity and supporting plans for another refinery project in Kenya.
Reuters reported that Dangote had earlier indicated that the refinery was aiming to increase production to about 1.4 million barrels per day. The source, however, said it was unclear whether proceeds from the proposed IPO would also be deployed towards the planned Kenyan refinery project.
The refinery, located in Lagos, has an installed capacity of 650,000 barrels per day and began operations in 2024 before reaching full operational capacity earlier this year. It is estimated to have cost about $20 billion to build, while the Nigerian National Petroleum Company Limited (NNPC) holds a stake of slightly above seven per cent.
The report also indicated that investors would have the option of subscribing in either naira or United States dollars. Although details of the proposed offer, including the size of the stake to be sold, have not been disclosed, Reuters reported that a private placement concluded last month valued the refinery at about $40 billion after investors acquired a six per cent stake for approximately $2.5 billion.
That valuation, however, compares with significantly lower market values for established international refining companies. Reuters noted that Turkey’s Tupras, which has refining capacity similar to Dangote’s across four refineries, has a market capitalisation of about $12 billion, while United States-listed HF Sinclair, with refining capacity of approximately 678,000 barrels per day, is valued at about $16 billion.
Both sources cited by Reuters spoke on condition of anonymity because the proposed transaction remains confidential. Dangote did not respond to Reuters’ request for comment.
The report further stated that while the Nigerian Exchange requires a minimum free float of 20 per cent for companies listed on its main board, exceptions have been granted previously. Dangote Cement Plc, another company within the Dangote Group, has a free float of just over 12.7 per cent.
According to the source, investors outside Nigeria may participate through “structured solutions” such as global depositary receipts or exchange-traded instruments that mirror the Nigerian-listed shares and provide entitlement to future dividends. A cross-listing on other African exchanges is not currently being considered.
The proposed listing comes as Dangote seeks to deepen its presence in Africa’s refining industry. According to Reuters, the businessman is also pursuing plans to develop a refinery on Kenya’s coast in partnership with East African governments as part of efforts to expand refining capacity on the continent.
If completed, the IPO would rank among the largest capital market transactions in Nigeria and would further expand the range of large industrial companies available to domestic and foreign investors on the Nigerian Exchange.
