By Ayomide Otitoju
Chairman of Zenith Bank, Jim Ovia, and Chairman of Heirs Holdings, Tony Elumelu, were among prominent financial experts who attended the signing ceremony for the Dangote Petroleum Refinery’s initial public offering (IPO) in Lagos on Monday.
The refinery is offering 4.1 billion ordinary shares of $0.000013 each at ₦525 per share in what could become one of the largest capital market transactions in Nigeria’s history.
The ceremony was led by Aliko Dangote, President and Chief Executive Officer of Dangote Industries Limited, and marks the refinery’s first public offer since its commissioning in 2023.
The refinery, located in the Lekki Free Zone, Lagos, took nearly 10 years to construct at an estimated cost of $20 billion. With a refining capacity of 650,000 barrels per day, it is Africa’s largest single-train refinery.
The Securities and Exchange Commission has approved the IPO, paving the way for the public offer.
Proceeds from the offering will be used to finance an expansion of the facility, with the company targeting an increase in processing capacity from its current operational baseline of 700,000 barrels per day to 1.4 million barrels per day.
If achieved, the expansion would make the Dangote Refinery the world’s largest operating oil refinery, surpassing India’s Jamnagar complex.
The capital raise follows a $2.5 billion private placement completed in July.
At the offer price of ₦525 per share, the refinery’s implied market valuation stands at about $47 billion. If fully subscribed, the listing is expected to increase the total market capitalisation of the Nigerian Exchange by an estimated 30 to 40 per cent.
To attract institutional and retail investors, the company plans to pay dividends in US dollars, using foreign exchange earnings from refined petroleum products and petrochemical exports to help cushion investors against naira volatility.
Commissioned in May 2023, the Dangote Refinery currently meets more than 80 per cent of Nigeria’s domestic petrol demand.
However, its long-term performance will depend on crude oil availability, export growth and refining margins.
Data from the Africa Finance Corporation shows that African countries spend more than $230 billion annually on imported commodities, with refined fuel accounting for over 70 per cent of regional consumption.
The Dangote Group is positioning the refinery to help reduce the continent’s dependence on imported refined products and address the regional supply deficit.
As part of its broader expansion plans, the group is also expected to break ground on a 700,000-barrel-per-day coastal refinery in Lamu, Kenya, on September 30.
The September 14 public offering is expected to provide a major test of liquidity on the domestic exchange and investor appetite for large-scale industrial assets.
