Dangote Petroleum Refinery’s planned October IPO, which could become Africa’s largest, is designed to give Nigerians opportunity to share in the company’s growth, its CEO told Reuters, also saying that a foreign listing is at least three years away.
Dangote refinery has submitted an application for a $5 billion IPO to Nigeria’s Securities and Exchange Commission, although the final size is not decided.
“We really want to drive participation,” CEO David Bird said in an interview. “The mandate of the IPO was to be the people’s IPO.”
CEO David Bird said the company just needed at least three years of proven production and financial performance before pursuing an overseas listing, which could enhance a stronger valuation. A likely venue that have been mentioned is London.
Bird turned down the comment on the size of the IPO or the refinery’s valuation. He revealed that the company could take into account the $2.5 billion raised in a July private placement, which valued the refinery at about $40 billion.
Bird spoke about the preparations that preparations for the IPO were on schedule and investor interest had been strong during pre-marketing and the July private placement.
Africa Finance Corporation said on Thursday it led a group of strategic investors in the private placement, adding the deal was 3.7 times subscribed and attracted strong demand from African and international institutional investors.
Dangote refinery compared favourably with U.S. refining assets because of its access to local crude supplies, strong domestic demand and integrated operations.
Bird confirmed the company aims to double refining capacity to 1.4 million barrels per day within three years, funded partly through the IPO and debt. He said the expansion would cost far less than the approximately $20 billion used to build the original refinery.