Aliko Dangote is not done building. His refinery’s Nigerian public offering is still getting subscriptions, and the billionaire is already talking about listing globally.
The firm is targeting the first quarter of 2029, which means the US listing could be just years away.
What Dangote said about a New York listing
Dangote said at the Qatar Economic Forum that he plans to list first in Nigeria, then move forward to his public debut in New York once the refinery has doubled its processing capacity, Bloomberg reported.
“We are doing a primary listing in Nigeria and then we will also hopefully list in New York,” he said. “But that is after we deliver the expansion.”
Dangote tied the New York listing to a specific production target instead of a fixed date.
The refinery currently processes 700,000 barrels of crude a day and is working toward 1.4 million barrels a day by the first quarter of 2029, according to the chairman.
A secondary listing in New York would give the company access to a pool of investors apart from Africa, he said.
The company is currently working with banks to let Africans outside Nigeria participate in the primary Nigerian listing, having found “a way for them to invest,” Dangote said.
The company had previously flagged that a foreign listing was possible, though the immediate priority was the Nigerian offer.
The New York ambitions follow a private placement round that ran far ahead of plan
Dangote said the company initially targeted $1 billion but drew $3.7 billion in demand, allowing it to take more than planned while still returning about $1.2 billion to investors, according to Business Insider Africa.
How the New York timeline will play out
- Current capacity: 700,000 barrels a day
- Target capacity: 1.4 million barrels a day by the first quarter of 2029
- Sequence: Nigeria listing first, New York listing only after the expansion is complete
- Refinery CEO David Bird said in August the company would not pursue a foreign listing for at least three years, setting a 2029 timeline.
- Estimated expansion cost: about $14.3 billion, according to BusinessDay
The Nigerian IPO still open
The Nigerian public offering that preceded the private placement would be open through October 13, comprising 4.1 billion shares priced at #525 each, with a minimum subscription of 10 shares.
The offer could raise about #2.15 trillion, roughly $1.6 billion, if fully subscribed.
Even before a US listing enters the picture, analysts are split on what the Nigerian shares are worth.
GTI Research puts fair value at #493, below the #525 offer price, while CardinalStone Research has set a #688.09 target.
Renaissance Capital Africa’s estimate tops out 32% above the offer price, Nairametrics reported.
BusinessDay’s editorial board also modeled mid-cycle conditions and landed far below the other estimates, at ₦176 to ₦324 a share. This is practically half the offer price at the top end.
Three of the bull estimates come from the underwriters
CardinalStone, Chapel Hill Denham and Renaissance Securities are all listed among the joint issuing houses underwriting the Nigerian offer.
More Dangote refinery coverage:
- Fintechs waive every fee on Dangote’s ₦2.15tn IPO
- Dangote lifts Nigeria refining to record 43.94% in Q2
How the shares were distributed
Dangote Group has branded the Nigerian sale a “People’s IPO,” targeting at least 10 million shareholders off a minimum ticket of just 10 shares, about ₦5,250.
But the ownership being transferred is quite small, according to many experts.
About 4.1 billion new shares, which is only about 3.3% of the enlarged company, would be shared.
This shrinks to about 2.46% once an anchor commitment of up to 1.04 billion shares is allotted.
Dangote’s own stake would fall from 87.27% to about 84.39%, and NNPC’s from 6.815% to about 6.59%.
Meanwhile, the company has continued to break ground as it expands across the continent.
The company is also preparing to break ground on a proposed 700,000-barrel-a-day refinery in Kenya, alongside pipeline projects linking Djibouti to Ethiopia and a 2,650-kilometer line connecting Namibia, Botswana and South Africa, Buisnessfront reported.
“By the time we finish, I am sure we’ll end up with almost 4,000 kilometers of pipelines,” Dangote said, adding that the budget for the southern African pipeline exceeds $3.5 billion.
The bull case from inside the company
Dangote Industries executives have been quite bullish on the potential returns the stock can deliver.
Edwin Devakumar, the company’s vice president for oil and gas, said the refinery “has started making profits” and called the Nigerian offering “an invitation to participate in a historic enterprise that is redefining the African energy landscape.”
He added that investors who subscribe “will be well-positioned to reap bountiful returns as the refinery continues its growth journey, ZAWYA reported.
