Dangote Petroleum Refinery & Petrochemicals FZE is offering investors in East Africa nearly 20% of its initial public offering, after regulators in Kenya and Uganda approved local participation in Africa’s largest share sale.
The refinery plans to sell about 729 million global depositary receipts at 53.50 Kenyan shillings each, raising about 39 billion shillings, or $300.4 million, according to an information memorandum released Wednesday.
Each receipt represents one share and will list on the Nairobi Securities Exchange. Kenya’s Capital Markets Authority approved the offer, while Uganda’s regulator authorised promoting it to local investors.
The main offer in Nigeria is 4.1 billion shares at N525 each, seeking about $1.6 billion and valuing the refinery at about $47.6 billion. Kenyan buyers pay a little more: about $0.412 a receipt, against about $0.397 for a Nigerian share, a premium of roughly 4%.
The entry bar is high. The minimum order is 2,000 receipts, or about 107,000 shillings ($824), against about $4 for the minimum order in Nigeria.
Business Daily reported that this will shut out many small Kenyan investors. The offer needs only 50 million shillings, about $385,000, to go ahead, so the Nairobi listing is near-certain even if demand is weak. The offer closes on October 13, alongside the Nigerian sale.
Allotments are due around November 12, with the receipts listing in Nairobi in early December.
Renaissance Capital is lead adviser, and Stanbic Bank Kenya is custodian. The receipts are shares in the Lagos refinery, not Dangote’s proposed refinery at Lamu in Kenya, which has its own financing plan.
