NAIROBI, Kenya – Kenyan investors can now participate in the Initial Public Offering (IPO) of Dangote Petroleum Refinery and Petrochemicals (DPRP) after the Capital Markets Authority (CMA) approved a Short Form Prospectus for Global Depository Receipts (GDRs).
The approval allows eligible investors in Kenya to access the Nigerian refinery’s IPO through GDRs, which are negotiable certificates issued by a depository bank to represent shares in a foreign company.
In a statement on Monday, October 5, CMA said it had approved the prospectus submitted by Renaissance Capital (Kenya) Limited, a licensed investment bank.
“The Capital Markets Authority (CMA) has approved a Short Form Prospectus for a global depository receipt (GDR) submitted by Renaissance Capital (Kenya) Limited,” the authority said.
GDRs Expected To Be Listed On NSE
Under the arrangement, Renaissance Capital Kenya will put in place appropriate custodial arrangements for funds received from Kenyan investors.
The investment bank is working with Renaissance Capital Africa, which is licensed in Nigeria.
Once the Dangote Refinery IPO closes and the allocation of shares is confirmed, Renaissance Capital Kenya will structure the GDRs.
The GDRs are expected to be listed on the Nairobi Securities Exchange (NSE), although the listing will require relevant approvals from Nigeria’s Securities and Exchange Commission.
“Listing of the GDRs at NSE will be subject to obtaining relevant approvals from the Securities and Exchange Commission, Nigeria,” CMA said.
Dangote IPO Closes October 13
The CMA approval comes as Dangote Group’s IPO remains open to investors, with the offer having opened on September 14 and scheduled to close on October 13.
The development is expected to provide Kenyan investors with a route to participate in the Nigerian refinery’s share offer after many prospective investors had expressed interest in acquiring shares.
The refinery is one of Dangote Group’s major investments in Nigeria and the IPO has been opened to Nigerian and other African investors.
Lamu Refinery Not Part Of IPO
CMA, however, clarified that the IPO only covers Dangote Petroleum Refinery and Petrochemicals FZE in Nigeria.
The approval does not give Kenyan investors access to shares in the planned Dangote East African Petroleum Refinery and Petrochemicals project in Lamu County.
“CMA wishes to clarify that the DPRP IPO relates only to Dangote Petroleum Refinery & Petrochemicals FZE based in Nigeria, and at this time, is not an offer of shares in the Dangote East African Petroleum Refinery and Petrochemicals project in Lamu County,” the authority said.
The clarification comes days after Dangote Group broke ground for the Sh2.2 trillion East African refinery project in Lamu.
CMA Issues Investment Warning
The regulator cautioned investors that its approval of the Short Form Prospectus should not be interpreted as a recommendation to invest in Dangote Refinery.
CMA urged prospective investors to read the prospectus carefully to understand the structure and terms of the offer before committing funds.
The authority also advised investors to seek independent professional investment advice when considering whether to participate in the IPO.
