Africa’s Richest Man Dangote Seeks to Raise $1.6 Billion Through Oil Refinery IPO

Aliko Dangote, known as Africa’s richest man, is set to raise at least $1.6 billion (approximately 2 trillion won) through the initial public offering (IPO) of his oil refining company. Amid keen interest in whether this will become the largest IPO in Africa’s history, the Dangote team emphasized that the company’s valuation reflects profitability sustainable under normal business conditions, not just temporary gains from wartime market disruptions.

Reuters Yonhap News

The Financial Times (FT) reported on September 8 (local time) that Dangote Petroleum Refinery and Petrochemicals, owned by Dangote, will offer 4.1 billion shares at 525 naira per share (about $0.40). The IPO values the company at $49 billion. By setting the minimum subscription at 10 shares, the company aims to attract retail investors, encouraging broad participation from individual shareholders.

Dangote, announcing the IPO plan at the Nigerian Stock Exchange, stated, "Our target is to secure 10 million shareholders across Africa and worldwide." He added, "If you can buy 10 shares, buy 10; if you can buy 1 million shares, buy 1 million," expressing the intent to encourage broad participation regardless of investment size.

Dangote spent 10 years building the refinery on wetlands outside Lagos, Nigeria. Operations began in 2024. This marked a turning point for Nigeria, transforming it from a country that heavily imported refined petroleum products into an exporter.

David Byrd, former Shell executive and head of Dangote’s refining and petrochemical division, explained that the $49 billion valuation was based on the results of a $2.5 billion private equity fundraising completed in July. He refuted suggestions that unexpected supply disruptions due to the Iran war—leading to a sharp jump in refining margins for diesel and jet fuel—had artificially inflated the company's valuation.

Dangote also emphasized that the valuation reflects profitability sustainable even under normal market conditions, and is not just a result of windfall gains from war. He said, "We do not operate on the assumption of crises," adding, "Our business is based on normal market trends, and anything in excess of that is simply additional profit."

The company plans to release its prospectus on September 14, coinciding with the start of the IPO. Funds raised will be invested in building large-scale storage facilities to supply refined petroleum products across Africa. The first facility is planned for Namibia. Additionally, the company aims to double its refining capacity by 2030 compared to current levels, while also expanding production of other petrochemical products such as detergent raw materials.

Dangote initially sought a pan-African IPO targeting investors across the continent. However, due to complex regulations, the company was unable to pursue simultaneous listings on other African stock exchanges.

Byrd stressed that despite the absence of simultaneous listings on other African exchanges, the IPO’s pan-African nature remains intact. He explained that investors from other African countries can still participate via institutional investors.

Kashim Garba Kurfi, CEO of APT Securities and Funds, said, "The minimum subscription is only 10 shares, and the price is just 525 naira per share, making this IPO accessible for retail investors without burden."

This IPO will close on October 13. The shares are scheduled to be listed on the Nigerian Stock Exchange in November. The Nigerian market has risen by 72% in dollar terms so far this year, making it one of the top-performing exchanges worldwide.

This content was produced with the assistance of AI translation services.