Dangote Petroleum Refinery's initial public offering has attracted share applications worth about N5.85 trillion, nearly three times the amount it initially targeted to raise, according to Bloomberg reporting. The offering, described as Africa's largest public share sale to date, has drawn strong interest from both local and international investors, with applications from all 54 African countries. The refinery had targeted to raise at least $1.6bn through the IPO but received about $1.9bn in investment interest from Nigerian investors and another $2.1bn from prospective international buyers.
The scale of retail participation in the share sale has been substantial, with close to four million unique subscription applications received, according to people familiar with the transaction cited by Bloomberg. The refinery had earlier targeted 10 million retail investors as part of efforts to broaden its ownership base beyond institutional investors and wealthy individuals. Institutional investors have also shown significant interest in the offer, including pension fund managers in Nigeria and South Africa. The Public Investment Corporation, which manages about $220bn in pension assets belonging to South African state workers, reportedly requested a large allocation in the refinery. Nigerian pension fund managers, whose investments cover about 11 million members, also sought allocations.
The level of demand has exceeded the available shares, even as the company considered increasing the size of the offering to accommodate more investors. The company was previously expected to exercise an additional 30 per cent over-allotment option, largely to create room for overseas investors. Even with the proposed expansion, demand from foreign investors has exceeded the available shares. The proposed additional allocation could increase the amount raised from the IPO to about $2.1bn, above the initial target of at least $1.6bn.
The refinery is expected to submit a draft share allotment announcement to the Securities and Exchange Commission this week, according to people familiar with the transaction. The regulator is expected to approve the distribution of shares on 17 November, while trading is scheduled to begin 15 business days after the allotment date. Based on that timeline, trading could commence around 8 December, although the company is targeting the commencement of trading before the end of November, subject to regulatory approvals.
Owned by Africa's richest man, Aliko Dangote, the 700,000-barrel-per-day refinery is located in the Lekki area of Lagos State and is a major part of Nigeria's efforts to reduce dependence on imported petroleum products. The IPO is expected to broaden the refinery's ownership structure, attract long-term institutional capital and deepen participation in the continent's capital markets. The offering has also demonstrated the capacity of African investors to provide significant funding for major projects on the continent, rather than relying primarily on international financial centres such as London and Wall Street.