Dangote Petroleum Refinery’s initial public offering has attracted share applications worth about N5.85 trillion ($4.1bn), nearly three times the amount it initially targeted to raise, as investors from Nigeria and other parts of Africa scramble to acquire stakes in the facility.
According to a report by Bloomberg, the offering, described as Africa’s largest public share sale to date, has drawn strong interest from both local and international investors, with applications from all 54 African countries.
The refinery had targeted to raise at least $1.6bn through the IPO but received about $1.9bn in investment interest from Nigerian investors and another $2.1bn from prospective international buyers, people familiar with the transaction told Bloomberg.
The report said the level of demand had exceeded the available shares, even as the company considered increasing the size of the offering to accommodate more investors.
“There are close to four million unique subscription applications,” the people familiar with the transaction said, according to Bloomberg, indicating the scale of retail participation in the share sale.
The refinery had earlier targeted 10 million retail investors as part of efforts to broaden its ownership base beyond institutional investors and wealthy individuals.
Institutional investors have also shown significant interest in the offer, including pension fund managers in Nigeria and South Africa.
The Public Investment Corporation, which manages about $220bn in pension assets belonging to South African state workers, reportedly requested a large allocation in the refinery, although the people familiar with the transaction did not disclose the amount.
Nigerian pension fund managers, whose investments cover about 11 million members, also sought allocations, Bloomberg reported.
The report added that the South African fund’s request could be accommodated through a secondary share sale, potentially providing additional room for investors seeking to acquire stakes in the refinery.
The strong foreign interest has also raised the possibility of an expanded allocation, with Bloomberg reporting last month that the company was expected to exercise an additional 30 per cent over-allotment option, largely to create room for overseas investors.
Even with the proposed expansion, demand from foreign investors has exceeded the available shares.
“Even with the expanded allocation that would take the fundraising to about $2.1bn, demand from foreign investors has exceeded available stock,” the report said.
The proposed additional allocation could increase the amount raised from the IPO to about $2.1bn, above the initial target of at least $1.6bn.