Africa’s largest refinery just pulled in another $400 million ahead of its initial public offering

The Dangote Refinery, which is a few weeks from going public, has secured a $400 million underwriting commitment for its planned initial public offering.

• The Dangote Refinery is preparing for an IPO and has secured a $400 million underwriting commitment from Marob Strategies and Lilium Capital Group.
• This commitment is subject to IPO launch conditions, regulatory approvals, and market circumstances.
• The IPO has attracted strong interest across African markets, with Kenya potentially contributing up to $500 million through institutional investors.
• The refinery plans to list first in Nigeria, with potential secondary listings in other African markets such as South Africa's Johannesburg Stock Exchange.

The reported $400 million commitment is courtesy of the global financial advisory and consulting firm Marob Strategies and Consulting DIFC Ltd. and the pan-African focused investment holding company Lilium Capital Group.

This will be “implemented upon the launch of the IPO, subject to market conditions, corporate and regulatory approvals, the execution of definitive documentation and compliance with applicable securities laws,” they said in the statement.

Marob Capital and Lilium Capital reported that they successfully provided $600 million for the private placement via an underwriting commitment, and have since been offering these equity shares to “African and Caribbean sovereign wealth funds, governments, institutional investors and other eligible investors.”

“The investor response has been strong and strategically significant,” the co-advisers said, adding that it reflects “demand for high-quality, globally significant industrial assets and for transactions that give African and Africa-linked capital a direct role in financing Africa’s growth platforms.”

According to an email statement reported by Bloomberg, both companies have been designated as co-financial advisers to the refinery.

This sum represents a substantial contribution toward the target valuation, through which Aliko Dangote, Africa’s wealthiest individual and the owner of the refinery, aims to secure $5 billion.

Currently, the refinery has successfully secured $2.5 billion through an oversubscribed private placement.

Interest in the Dangote IPO across Africa

The Dangote Refinery listing has recently piqued the interest of stock exchanges across some of Africa’s strongest markets.

Conversations have been initiated with the refinery's advisers about how to offer investors in those markets access to the share sale.

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Word of a prospective Pan-African listing initially arose in April, when the head of the Nairobi Securities Exchange Plc stated that Aliko Dangote intends to float his refinery on different African capital markets.

According to an email from FirstCap CEO Ukandu E. Ukandu, Dangote selected Stanbic IBTC Capital Ltd., Vetiva Advisory Services Ltd., and FirstCap Ltd. to assist with the IPO of Dangote Petroleum Refinery and Petrochemicals FZE.

Last month, sources revealed that Kenya's capital markets could contribute up to $500 million to the IPO, reflecting strong demand from institutional investors, including pension funds.

If achieved, Kenyan investors alone would account for about 10% of the planned fundraising.

Additionally, reports indicate that Africa's largest stock market is preparing to host a secondary listing of the Dangote Petroleum Refinery.

The Johannesburg Stock Exchange (JSE) acknowledged that it has been in contact with the Dangote Group and that the business plans to seek a listing in Nigeria first before considering a secondary listing in South Africa.