Dangote Refinery IPO attracts strong investor demand as Otedola pledges $100m stake

By Udeme Akpan, Energy Editor

Africa’s richest man and President of the Dangote Group, Aliko Dangote, has disclosed that the planned initial public offering, IPO, of the Dangote Petroleum Refinery & Petrochemicals is already attracting billions of dollars in investor interest ahead of its proposed market debut in September.

Speaking during an interaction with journalists and senior executives of First Bank of Nigeria, Dangote said demand for shares in the refinery had been overwhelming, with investors already pushing aggressively to participate in both the private placement and public offer.

According to him, Chairman of First HoldCo, Femi Otedola, in his personal capacity, has pledged to purchase $100 million worth of shares in the private placement.
“You had the chairman of the bank, in his personal capacity, pledge to buy $100 million worth of shares in the IPO,” Dangote said.
He added that although the official valuation and listing price were still being worked out by advisers, the company had already recorded requests running into almost $2 billion from investors seeking allocation in the private placement.
“We have a lot of demand in billions of dollars. When we even said we were going to do private placement, people immediately requested to buy. We already have requests of almost $2 billion,” he said.
Dangote explained that the public offer would largely target retail investors in line with the company’s vision of democratizing wealth creation across Africa.
“The IPO is mainly retail because our target really is to get the larger part of society to buy. We want ordinary people to benefit from the upside,” he stated.
He described the refinery as one of the largest industrial projects globally, noting that the facility would account for about 10 per cent of the refining capacity of the United States.
“We are going to have 10 per cent of the refining capacity of the entire America. It is going to be the largest refinery ever on the earth. It is not a small business,” he said.
Dangote also projected that the refinery business alone would generate the highest turnover of any company in Africa based on current operational numbers.
On valuation concerns, Dangote dismissed speculation that the refinery could be valued at as much as $100 billion, noting that the company intentionally wanted to allow investors enter at a lower valuation to benefit from future growth.
“What we are trying to do is bring people in at a low level so they can have upside. We want it to be like when you bought Amazon or Apple early and everybody became millionaires. That is the kind of value we want to create in Africa,” he said.
Speaking on the Group’s Vision 2030 target of generating $100 billion in annual revenue, Dangote said the projection represented only a minimum benchmark.
“If we stay at $100 billion revenue by 2030, then definitely we have not worked hard enough. We believe we will surpass that number,” he stated.
He also reaffirmed the Group’s long-standing relationship with its banking partners, particularly First Bank, stressing that institutions that supported the conglomerate’s growth over the years would continue to share in its expansion plans.
“We are not fair-weather friends. Banks that helped us get to where we are today will continue to grow with us,” he said.
On his part, Otedola said the leadership of First HoldCo visited the refinery complex as part of efforts to draw inspiration from Dangote’s industrial vision as the bank pursues its ambition of becoming one of the largest financial institutions in Sub-Saharan Africa within the next five years.
Describing Dangote as “a colossus and genius,” Otedola said the scale of investment at the refinery and other projects across Africa had strengthened his confidence in the continent’s industrial potential.
He disclosed that his decision to invest $100 million in the refinery IPO informed the sale of his stake in Geregu Power Plc.
“I sold my stake in Geregu Plant to invest the proceeds in the IPO of Dangote Refinery,” Otedola said. Also, Olusegun Alebiosu, Chief Executive Officer of FirstHoldco, said: “This visit is about seeing the power of vision and inspiration. When you see this refinery and realize that an individual stood up bravely and built it — a project that has perhaps saved the continent — it makes you pause and ask: Why don’t I key into this vision? What can I do?

“Look at the entire ecosystem here. The more we see this across the Group, the more we can inspire similar ambition in the countries where we operate. And those colleagues from those countries will go back and speak to their own people, encouraging them to put forward something equally inspiring.

“Today, we have people here from the DRC, Gambia, Sierra Leone, Ghana, the UK, Guinea, Senegal, and beyond. I’m sure they will return home and speak to their teams and stakeholders about what’s possible, and push for big, bold initiatives in their own markets.”

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