NAIROBI, Kenya- Kenyan and other East African investors will be able to participate in Dangote Refinery’s initial public offering through global depositary receipts, Renaissance Capital Chief Executive Officer Stanley Kariuki.
The arrangement would give investors in the region a route into the Nigerian refining business as billionaire Aliko Dangote seeks to broaden public ownership of the company.
The IPO concerns Dangote’s existing refinery business in Nigeria.
It is separate from the proposed East Africa refinery in Lamu, where a groundbreaking ceremony is scheduled for September 30.
How the receipts work
Global depositary receipts, commonly called GDRs, are financial instruments representing shares held through a depositary arrangement.
They allow investors to gain exposure to a company’s shares through a separate security.
The underlying shares are held by a custodian on behalf of the depositary bank.
For East African investors, the proposed arrangement would provide access to Dangote’s Nigerian refinery offer through these receipts.
However, Kariuki’s statement supplied for this report does not specify the subscription process, minimum investment, trading currency or when the receipts would become available.
It also does not establish whether they would be listed on the Nairobi Securities Exchange.
Share sale to support expansion
Dangote’s refinery IPO involves the sale of 4.1 billion shares at 525 naira each, targeting approximately 2.15 trillion naira, or $1.6 billion.
The shares are intended for listing on Nigeria’s main stock exchange.
According to offering details reported by Reuters, the subscription period runs from September 14 to October 13.
The proceeds are intended to support a planned expansion that would double the refinery’s processing capacity to 1.4 million barrels a day.
The offer gives investors an opportunity to acquire an interest in an operating refining business as Dangote expands his energy investments across Africa.
Separate plans for Lamu
The announcement comes amid growing attention in Kenya to Dangote’s proposed refinery in Lamu, which is designed to process 700,000 barrels of crude oil a day.
Dangote Group said on Tuesday that the groundbreaking would proceed despite a court ruling over disputed land, although the order could affect some site activities.
President William Ruto has separately said the Kenyan government will hold a stake in the Lamu project and that ordinary Kenyans will have an opportunity to buy shares through the Nairobi Securities Exchange.
His statement did not specify the size of the public offer, its timing or the share price.
The two announcements concern different investments: access through global depositary receipts relates to the Nigerian refinery IPO, while Ruto’s pledge concerns future participation in the proposed Lamu development.
Speaking at an investors’ meeting at the Nairobi Securities Exchange on Tuesday, Dangote also said he intended to list his fertiliser company in 2027.
The announcement adds another potential public offering to the group’s plans as it expands its refining and fertiliser businesses.
