$1b underwriting deal boosts Dangote Refinery’s planned IPO

By Ambrose Nnaji

The planned initial public offering (IPO) of Dangote Petroleum Refinery and Petrochemicals has moved closer to the capital market with the completion of a $1 billion underwriting programme designed to support the proposed listing.

The programme, structured by Marob Strategies and Consulting DIFC Ltd and Lilium Capital Group, comprises a completed and funded $600 million private placement and an additional $400 million underwriting commitment for the planned IPO.

The $600 million private placement was underwritten and funded by Pan-African Refinery Investment SPV, a subsidiary of Lilium Capital Group.

Marob Strategies and Lilium Capital are coordinating the distribution of the underwriting participation across Global Africa, targeting sovereign wealth funds, governments, institutional investors and other eligible investors.

The advisers said the response from potential investors has been strong, reflecting growing institutional interest in large-scale African assets with the potential to generate long-term economic value.

They said the programme could also encourage greater intra-African capital flows and contribute to the development of a more integrated African capital market under the African Continental Free Trade Area (AfCFTA).

Beyond supporting the proposed IPO, the $1 billion underwriting programme is intended to broaden ownership of the refinery and demonstrate the capacity of African financial institutions to mobilise long-term capital for strategic industrial projects.

The initiative is expected to support objectives including industrialisation, energy security, import substitution and increased intra-African trade.

President and Chief Executive Officer of Dangote Industries Limited, Aliko Dangote, described the transaction as an important milestone for the refinery and African capital markets.

“This is an important milestone for DPRP and for African capital markets,” Dangote said.

He said the transaction demonstrated investor confidence in the refinery’s strategic importance while creating an opportunity for broader participation by African and Caribbean sovereign wealth funds, governments and institutional investors across Global Africa.

“The successful completion of the private placement, together with the $400 million underwriting commitment provided by Pan-African Refinery Investment SPV in support of the planned IPO, reflects confidence in the refinery’s strategic role,” he said.

Dangote added that the work by Marob Strategies and Lilium Capital had created a platform for wider participation by institutional investors across Global Africa.

Chairman of Marob Strategies, Benedict Okey Oramah, said the transaction demonstrated the appetite for African-led capital market deals that provide investors with access to transformative assets on the continent.

He said the firm was now focused on a disciplined distribution of the underwriting participation across Global Africa, with engagements involving sovereign wealth funds, governments, institutional investors and other eligible investors.

“The level of interest confirms the appetite for African-led capital markets transactions that provide investors with access to transformative assets on the continent,” Oramah said.

According to him, the transaction could set the stage for similar capital market deals involving major African assets.

Chairman of Lilium Capital Group, Simon Tiemtoré, said the mandate reflected the firm’s strategy of connecting major African investment opportunities with institutional investors across Global Africa and international markets.

He said mobilising long-term capital for strategic assets such as the Dangote refinery would support industrialisation, strengthen African capital markets and contribute to sustainable economic growth.

“We are proud to support DPRP on this landmark transaction and look forward to mobilising capital for more transformative projects that create lasting value for Africa,” Tiemtoré said.

The proposed IPO would give investors an opportunity to participate in one of Africa’s largest industrial and energy projects, while potentially providing the refinery with a broader domestic and international shareholder base.