Dangote Refinery Secures $1bn Backing for Planned IPO

The Dangote Petroleum Refinery and Petrochemicals has secured a $1 billion underwriting programme ahead of its planned Initial Public Offering (IPO).

The programme, structured by Marob Strategies and Consulting DIFC Ltd and Lilium Capital Group, comprises a completed and funded $600 million private placement and a further $400 million underwriting commitment in support of the planned IPO.

The Dangote Group said in a statement on Tuesday that the $600 million private placement had been underwritten and funded by Pan-African Refinery Investment SPV, a subsidiary of Lilium Capital Group.

It added that Marob Strategies and Lilium Capital were coordinating the distribution of the underwriting participation across Global Africa, targeting sovereign wealth funds, governments, institutional investors and other eligible investors.

The advisers said the response had been strong, reflecting growing institutional interest in large-scale African assets with long-term economic potential.

The programme is also expected to facilitate greater intra-African capital flows and contribute to the development of a more integrated African capital market under the African Continental Free Trade Area.

President and Chief Executive Officer of Dangote Industries Limited, Aliko Dangote, described the transaction as an important milestone for the refinery and African capital markets.

The $400 million underwriting commitment is expected to be implemented when the IPO is launched, subject to market conditions and regulatory approvals.

The refinery has applied to the Securities and Exchange Commission to raise up to $5 billion through the IPO, which could become Africa's largest public offering.

The $20 billion refinery, located near Lagos, has a refining capacity of about 700,000 barrels of crude oil per day and has attracted increased international investor interest amid disruptions to global energy supplies.

The planned IPO is expected to broaden ownership of the refinery and attract more long-term capital into Nigeria's energy sector.

The development also comes after the refinery recently completed a $2.5 billion private placement, which attracted strong demand from African and international institutional investors.