Dangote Refinery Extends IPO to Allow More Investors

Dangote Petroleum Refinery and Petrochemicals has pushed back its $1.6 billion initial public offering (IPO). This IPO is the biggest ever in Africa. The company announced this extension on Monday, saying it will last two weeks to allow more people from Africa to join in.

The company said, "The IPO is going very well. We will extend the closing date because we want more of our African brothers and sisters to participate."

In the statement, the company added, "Following our discussions with the Nairobi Stock Exchange, we have identified what we believe is the best way to facilitate participation. We are now trying to replicate that arrangement with other African exchanges to ensure wider participation."

The public share sale opened for subscription on 14 September. It was supposed to close on 13 October, but with the extension, it will now run until 27 October.

The refinery is mostly owned by Africa’s richest man, Aliko Dangote. The Securities and Exchange Commission has approved this extension.

The money raised from the IPO will be used to expand the 700,000 barrel-per-day crude refining plant on the outskirts of Lagos. This expansion is expected to double the plant's current capacity by 2030.

A total of 4.1 billion shares are being sold at N525 each. The minimum subscription is for 10 shares. The IPO also includes a green shoe option. This option allows for an extra 30 percent of shares to be sold if there is high demand.

In July, a private placement before the IPO was oversubscribed by 270 percent, even though the plan was to raise $2.5 billion.

Pan-African Refinery Investment SPV, which is part of Lilium Capital Group, provided $600 million for the private placement.

The IPO drew in billions of naira just minutes after it opened. Many trading platforms, like Bamboo and Cowrywise, struggled on the first day because of the high number of subscriptions.

Mr Dangote mentioned in the Monday statement that the IPO has already gathered subscriptions of "more than three or four times" the amount the company aimed to raise.

The company believes that this extension will help expand access to the IPO throughout the continent. They plan to improve distribution channels and make it easier for people to invest across borders.

This extension will also give potential investors more time to finish account openings, identity verification, and meet other regulatory requirements needed to participate in the IPO.