Amanze Chinonye
Dangote Petroleum Refinery is preparing what could become Africa’s largest-ever initial public offering (IPO), seeking to raise about $5 billion in a share sale expected to be completed in October to finance expansion and strengthen the continent’s refining capacity.
Sources familiar with the transaction said the company has filed its application with the Securities and Exchange Commission (SEC), with regulatory approval expected in the coming weeks. Subject to clearance, the refinery plans to publish its prospectus in September ahead of its primary listing on the Nigerian Exchange (NGX).
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If successful, the transaction would rank as the largest equity offering in Africa’s history and account for more than four per cent of the Nigerian Exchange’s total market capitalisation, highlighting its significance for Nigeria’s capital market.
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The planned fundraising will provide fresh capital to expand the 650,000-barrel-per-day refinery in Lagos and support the development of similar facilities elsewhere on the continent, with Kenya identified as a potential location for the next refinery.
The offering is central to Aliko Dangote’s long-term strategy of reducing Africa’s dependence on imported refined petroleum products by increasing domestic refining capacity and positioning the continent as a net exporter of refined fuels.
The proposed listing has attracted interest from investors and stock exchanges across Africa. Exchanges in Kenya, South Africa, Egypt, Ghana and Rwanda have held discussions with the refinery’s advisers on arrangements that would enable investors in their markets to participate in the offering.
Kenya’s capital market alone could contribute up to $500 million, or about 10 per cent of the targeted fundraising, with pension funds and other institutional investors expected to account for much of the demand.
Although the Nigerian Exchange will host the primary listing, the company is not planning a dual listing on other African exchanges. Instead, investors outside Nigeria are expected to access the offer through structured instruments, including global depositary receipts and exchange-traded products linked to the Nigerian-listed shares.
The refinery’s investment appeal has strengthened following its emergence as a major exporter of aviation fuel during the recent Middle East conflict, when supply disruptions boosted exports to markets across Africa and Western Europe.
The company also completed a $2.5 billion private placement last month, selling a six per cent stake that valued the refinery at about $40 billion. While the transaction reflects investor confidence in the business, analysts say the valuation is likely to face close scrutiny during the IPO.
By comparison, Turkey’s Tupras, which operates four refineries with a combined capacity similar to Dangote’s, has a market value of about $12 billion, while U.S.-based HF Sinclair, with refining capacity of approximately 678,000 barrels per day, is valued at around $16 billion.
Built at an estimated cost of $20 billion, the Dangote refinery began operations in 2024 and reached full production capacity earlier this year. The Nigerian National Petroleum Company Limited (NNPC) owns slightly more than seven per cent of the business.
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Dangote has said the refinery is targeting an eventual processing capacity of 1.4 million barrels per day, further strengthening its ambition to establish one of the world’s largest refining hubs.
The IPO is also expected to test the flexibility of the Nigerian Exchange’s listing rules. Companies on the main board are generally required to maintain a minimum public float of 20 per cent, although exemptions have been granted in the past, including to Dangote Cement.
Discussions on the final structure of the transaction, including investor allocations, underwriting arrangements and participation by regional capital markets, are continuing. Investors are expected to have the option of subscribing in either naira or U.S. dollars.
If completed, the IPO would set a new benchmark for African capital markets, deepen liquidity on the Nigerian Exchange and provide Dangote Petroleum Refinery with the financial resources to accelerate its expansion across the continent.
The transaction would also advance Dangote’s vision of building an African-owned refining champion financed largely by African capital.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
