Dangote Petroleum Refinery & Petrochemicals has secured a $1 billion underwriting programme ahead of its planned Initial Public Offering (IPO), marking a significant step towards the proposed listing of the multibillion-dollar refinery.
The financing package comprises a completed and funded $600 million private placement and an additional $400 million underwriting commitment in support of the planned IPO.
The programme was structured by Marob Strategies and Consulting DIFC Ltd and Lilium Capital Group, while the $600 million private placement was underwritten and funded by Pan-African Refinery Investment SPV, a subsidiary of Lilium Capital Group.
Marob Strategies and Lilium Capital are now coordinating the distribution of underwriting participation across what the advisers described as “Global Africa”, targeting sovereign wealth funds, governments, institutional investors and other eligible investors.
According to the advisers, institutional response has been strong, reflecting growing appetite for large-scale African industrial assets capable of generating long-term economic value.
The programme is also expected to encourage greater intra-African capital flows and support efforts towards a more integrated African capital market under the African Continental Free Trade Area (AfCFTA).
Beyond providing financial backing for the refinery’s planned listing, the $1 billion programme is being positioned as a vehicle for broadening African ownership of a strategic industrial asset and demonstrating the capacity of African institutions to mobilise long-term capital for major projects.
It is also expected to contribute to capital-market development, industrialisation, energy security, import substitution and greater intra-African trade integration.
President and Chief Executive of Dangote Industries Limited, Aliko Dangote, described the transaction as an important milestone for the refinery and African capital markets.
“This is an important milestone for DPRP and for African capital markets,” Dangote said.
According to him, the completed private placement and additional underwriting commitment demonstrate confidence in the strategic importance of the refinery.
“The successful completion of the private placement, together with the US$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,” he said.
Dangote added that the work undertaken by Marob Strategies and Lilium Capital had created a platform for wider participation by African and Caribbean sovereign wealth funds, governments and institutional investors.
Chairman of Marob Strategies, Professor Benedict Okey Oramah, said the transaction demonstrated investor appetite for African-led capital-market deals offering exposure to transformative assets on the continent.
“As Chairman, I am very proud of the work undertaken by the management team at Marob Strategies to bring this transaction to fruition,” Oramah said.
He disclosed that Marob Strategies was now focused on the distribution phase and engaging sovereign wealth funds, governments, institutional investors and other eligible participants.
“The level of interest confirms the appetite for African-led capital markets transactions that provide investors with access to transformative assets on the continent,” he added.
Oramah said the success of the transaction could provide a template for similar African capital-market transactions in the future.
Chairman of Lilium Capital Group, Simon Tiemtoré, described the mandate as part of the firm’s strategy of connecting major African investment opportunities with institutional capital across Africa and international markets.
“This mandate reflects Lilium Capital’s commitment to connecting world-class African opportunities with institutional investors across Global Africa and international markets,” Tiemtoré said.
He added that mobilising long-term capital for strategic assets such as the Dangote refinery would support industrialisation, strengthen capital markets and contribute to sustainable economic growth across the continent.
The underwriting represents another major step towards the planned IPO of the refinery, although the statement did not disclose the proposed listing date, exchange, valuation, offer size or the proportion of the company expected to be offered to public investors.
The Dangote Petroleum Refinery, located in the Lekki Free Zone in Lagos, has emerged as one of Africa’s largest industrial projects and a major component of Nigeria’s efforts to expand domestic refining capacity and reduce dependence on imported petroleum products.
The proposed IPO would potentially broaden ownership of the refinery and give institutional and other eligible investors an opportunity to participate in one of the continent’s largest privately developed industrial assets.
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