Dangote Petroleum Refinery & Petrochemicals FZE is targeting about $5bn through an Initial Public Offering expected to conclude in October, with the proceeds earmarked to expand its Lagos refinery’s capacity to 1.4 million barrels per day.
According to a Reuters report on Tuesday, the proposed transaction could become Africa’s biggest-ever stock market listing.
Sources familiar with the transaction said the refinery had submitted an initial application to the Securities and Exchange Commission and was awaiting regulatory approval in the coming weeks. Subject to approval, the company is expected to publish its prospectus in September ahead of the October share sale.
One source familiar with the transaction said the refinery was targeting a $5bn fundraising, although the final amount would depend on the approval granted by the Nigerian regulator.
“The IPO’s target was $5bn, but the final figure will depend on what the Nigerian regulator approves, as the primary listing will be on the Nigerian Stock Exchange,” the source said.
If achieved, the fundraising would account for just over four per cent of the Nigerian Exchange’s All Share Index, whose market capitalisation stood at about $116bn on Tuesday.
The refinery, owned by Africa’s richest businessman, Aliko Dangote, plans to use the proceeds to increase refining capacity as part of efforts to reduce Africa’s dependence on imported refined petroleum products and strengthen the continent’s position as a fuel exporter.
According to the sources, the company is also considering constructing a refinery along the Kenyan coast in partnership with East African governments.
The planned public offering has attracted interest from capital markets across Africa. Stock exchanges in South Africa, Kenya, Egypt, Ghana and Rwanda have reportedly held discussions with the refinery’s advisers in recent months.
One source said Kenya’s capital market could contribute as much as $500m towards the IPO, citing strong demand from institutional investors. “There is tremendous appetite for the issue among local investors such as pension funds,” the source said.
The refinery also intends to make the offering a pan-African investment opportunity. According to one source, investors outside Nigeria may gain access to the IPO through structured investment products rather than a cross-listing.
The source explained, “Other capital markets on the continent that want a slice of the deal will have to craft structured solutions for their investors, such as global depositary receipts or exchange-traded instruments, which mirror the actual shares to be listed on the Nigerian exchange, including the right to accrue future dividends.”
However, the source clarified that a cross-listing or dual listing on other African exchanges was not planned. The proposed IPO follows a $2.5bn private placement completed last month for a six per cent stake, which valued the refinery at about $40bn.
Reuters noted that the valuation is significantly higher than those of some listed global refiners. Turkey’s Tupras, which has a combined refining capacity comparable to Dangote’s across four refineries, has a market value of about $12bn, while United States-listed HF Sinclair, with a refining capacity of 678,000 barrels per day, has a market capitalisation of around $16bn.
The refinery, which cost about $20bn to build, commenced operations in 2024 and reached full production capacity earlier this year. Nigeria’s state-owned Nigerian National Petroleum Company Limited holds a stake of just over seven per cent in the facility.
In April, Dangote announced plans to increase the refinery’s production capacity to 1.4 million barrels per day. The sources also disclosed that investors participating in the IPO would have the option of subscribing and receiving returns in either naira or US dollars.
According to the sources, Dangote wants the public offering to become “an African champion”, enabling capital markets across the continent to participate in financing one of Africa’s largest industrial assets.
Both sources requested anonymity because discussions surrounding the transaction remain confidential. Efforts to obtain comments from Dangote were unsuccessful.