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By Chinwendu Obienyi
Dangote Petroleum Refinery & Petrochemicals has raised $600m through a private placement and secured a further $400m underwriting commitment for its planned initial public offering, in a transaction aimed at broadening African participation in one of the continent’s largest industrial assets.
To break it down to granular details, the $600 million is money the refinery has already secured from selected investors, while the $400m underwriting commitment means that a financial institution or group has committed to backing the refinery’s planned share sale, potentially taking up shares that investors do not buy.
According to a statement, this will take effect only when the offering is launched, subject to market conditions, corporate and regulatory approvals, definitive agreements and compliance with securities laws.
Marob Strategies and Consulting DIFC and Lilium Capital Group, appointed as co-financial advisers and structuring agents, said on Tuesday that the $600m investment had been completed and funded.
The placement represents the first phase of a $1billion underwriting programme to support the refinery’s private fundraising and a prospective public listing. Pan-African Refinery Investment SPV, a subsidiary of Lilium Capital, is acting as underwriter for the programme.
The advisers are now seeking to sell down participation in the completed private-placement underwriting to African and Caribbean sovereign wealth funds, governments, institutional investors and other eligible investors across what they described as “Global Africa”.
This structure, the statement said, offers a route for African public and institutional capital to take stakes in the Dangote refinery, which is expected to play a central role in Nigeria’s ambition to reduce fuel imports and expand domestic refining capacity.
The refinery, located in Lagos’s Lekki Free Zone, is designed to process up to 650,000 barrels of crude a day.
It began producing diesel and aviation fuel in January 2024, followed by petrol output later that year, and has since become a significant factor in Nigeria’s fuel market and regional trade flows.
Supporters of the programme said it could help channel more long-term African capital into strategic infrastructure and industrial projects, while advancing the integration of the continent’s capital markets under the African Continental Free Trade Area agreement.
Commenting on the development, President and Chief Executive, Dangote Industries,
Aliko Dangote, said the completed placement and IPO commitment reflected confidence in the refinery’s strategic role.
“This is an important milestone for DPRP and for African capital markets,” he said. “The successful completion of the private placement, together with the $400 million underwriting commitment provided by Pan-African Refinery Investment SPV in support of the planned IPO, reflects confidence in the refinery’s strategic role.”
Dangote said the mandate had created scope for broader participation by African and Caribbean sovereign wealth funds, governments and institutional investors.
Chairman of Marob Strategies, Benedict Oramah, said the firm would focus on distributing the underwriting participation among eligible investors. He said the interest received so far illustrated investor appetite for African-led transactions linked to “transformative assets” on the continent.
“The success of this transaction paves the way for many more such transactions in the future,” Oramah said.
Simon Tiemtoré, chairman of Lilium Capital Group, said the mandate was intended to connect institutional investors across Africa and international markets with large-scale African investment opportunities.
“By mobilising long-term capital for strategic assets such as the Dangote Petroleum Refinery, we are supporting industrialisation, strengthening capital markets and contributing to sustainable economic growth across the continent,” he said.
The companies did not disclose the valuation applied to the private placement, the identity of investors funding the $600 million the proposed timing of the IPO or the exchange on which DPRP intends to list.
Those details will be closely watched by investors, particularly as Dangote Petroleum Refinery seeks to establish a stable operating record, secure sufficient crude supply and increase export sales across West Africa and beyond.
