Africa's largest refinery pulls in $4.1 billion for historic share sale

Africa's biggest oil refinery drew roughly 5.85 trillion naira, which equals $4.1 billion, in applications for shares in the continent's largest public offering ever. This total is almost three times the amount the company tried to raise. Dangote Petroleum Refinery and Petrochemicals FZE aimed for at least $1.6 billion in the initial public offering. It received about $1.9 billion from investors in Nigeria and another $2.1 billion from buyers outside the country.

Investors and Demand

The Public Investment Corp., which manages about $220 billion in pensions for South African government workers and stands as the continent's largest money manager, asked for a large share of the stock. Nigerian pension managers covering about 11 million members also requested allocations. Investors from all 54 African countries sent in applications. The process brought in close to 4 million unique subscription applications, along with pension funds representing tens of millions of contributors. Dangote had originally aimed to reach 10 million retail investors. A spokesman for Dangote declined to comment on the share sale, while the Public Investment Corp. stated it could not provide public comments at this stage.

Timeline and Future Steps

The company plans to submit a draft allotment announcement to the Securities and Exchange Commission in Nigeria this week. The regulator is expected to approve the share distribution plan on November 17. Trading is scheduled to start 15 business days after the allotment date, which points to December 8 based on the prospectus. However, the company aims to start trading by the end of this month if it gets the needed approvals. Last month, reports showed the company plans to use an additional 30 percent over-allotment option to create more room for overseas buyers.

Context

Public share offerings let private companies sell stock to the public to raise large amounts of money for business growth. Large industrial assets in emerging markets often attract heavy demand from both local and international investors seeking high returns. This listing marks a major step for African capital markets by drawing billions in local and global funds.