Investors subscribing to the Initial Public Offering (IPO) of Dangote Petroleum Refinery and Petrochemicals may receive dividends in United States dollars, a move that could make the offer particularly attractive to investors seeking protection against naira depreciation.
President/Chief Executive Officer of Dangote Group, Alhaji Aliko Dangote, disclosed this today at the facts-behind-the-offer presentation and opening gong ceremony of the refinery’s IPO on the floor of the Nigerian Exchange Limited (NGX) in Lagos.
Dangote said the refinery’s dollar-linked business model would enable investors to preserve the value of their investments despite possible fluctuations in the naira exchange rate.
“You will be getting your dividend in dollars,” he said.
According to him, because the underlying business is dollarised, investors would have an opportunity to hold an asset whose earnings are linked substantially to foreign currency.
He explained that even in the event of further currency devaluation, investors would continue to benefit from the dollar-linked nature of the business.
Dangote also disclosed that the Group was considering taking the refinery to an international capital market, with a potential listing in the United States within the next three to four years.
The proposed international listing, he said, would further broaden ownership of the refinery and expose the company to a larger pool of international investors.
The plan would also deepen the international profile of an asset that Dangote described as one of Africa’s most transformational industrial projects.
The proposed US listing comes as the refinery begins its transition from a privately held industrial asset to one with broader public ownership through the Nigerian capital market.
Dangote stressed that the refinery’s IPO was not primarily aimed at raising funds, saying the Group had already secured sufficient financing for its existing investment plans.
Rather, he said the public offer was designed to democratise wealth creation by allowing ordinary Nigerians and investors globally to acquire an interest in the refinery.
“The primary purpose of this offer is to democratise wealth creation,” Dangote said.
He said the private placement had already met the refinery’s funding requirements, meaning that the public offer was principally about giving investors the opportunity to participate in the value created by the asset.
Dangote specifically cited teachers, civil servants and Nigerians with families abroad as potential beneficiaries of the ownership opportunity.
He said the refinery should not create wealth for only a small number of investors, but should provide an opportunity for millions of people to participate in its growth.
Dangote urged prospective investors to look beyond the refinery’s current performance and focus on its future growth potential.
“You are buying the future,” he said, describing the refinery as an operating business with significant assets, revenues and growth opportunities.
He expressed confidence that the company would become one of Africa’s largest companies, arguing that its scale and capabilities would put it ahead of many major corporate and sovereign entities.
“This is a company that has already moved beyond the stage of promises. We are now dealing with reality.
“You are not investing in a story. You are investing in an operating business with significant assets, revenues and growth opportunities,” he said.
Dangote said the refinery had also recorded strong demand for its petroleum products, particularly aviation fuel.
He disclosed that the refinery had effectively sold out its jet fuel production for August and September, apart from volumes reserved for specific customers.
The development, according to him, demonstrates the refinery’s growing importance beyond the Nigerian market, particularly as it supplies petroleum products to international markets.
He also argued that concerns about the global transition away from fossil fuels should not lead investors to underestimate the long-term relevance of petroleum.
According to Dangote, crude oil remains important not only for fuel production but also as a feedstock for petrochemicals and manufacturing.
He pointed to the extensive use of petroleum-derived plastics in automobiles and other manufactured products as evidence that oil would continue to play an important role in the global economy.
Chairman of NGX Group, Alhaji Umaru Kwairanga, said the Dangote Refinery IPO would demonstrate the capacity of Nigeria’s capital market to support large-scale businesses.
Kwairanga disclosed that the offer was valued at more than $1.6 billion, with the potential to reach $2 billion if the greenshoe option is fully exercised.
He described the transaction as Africa’s biggest IPO and said it represented a major opportunity to connect Nigerian and African savings with a globally competitive Nigerian enterprise.
According to him, the transaction would test the capacity of the domestic market to mobilise capital on a scale required to finance major infrastructure and industrial projects.
“A transaction of this scale tests that proposition and demonstrates what our market can achieve when capital, enterprise, and ambition come together,” Kwairanga said.
He described Dangote’s return to the NGX as a “homecoming”, recalling his previous role as President of the Council of the Nigerian Stock Exchange and his contribution to the development of Nigeria’s capital market.
Lagos State Governor, Mr. Babajide Sanwo-Olu, described the IPO as a historic development for Nigeria and Africa.
He said the transaction demonstrated that African capital could be deployed to finance African businesses and create opportunities for Africans to participate in wealth creation.
Sanwo-Olu urged market operators to ensure that the offer reached a broad spectrum of Nigerians, including traders, technology entrepreneurs and farmers.
“This is about market creation. This is about deepening the market. This is about opening opportunity for everybody, from the market woman that is in Balogun, to the young tech-savvy that is in Yaba, to the farmer that is in Kano,” he said.
The governor said the transaction was bigger than Dangote Refinery alone, describing it as an opportunity to deepen Nigeria’s capital market and expand public participation in the ownership of major Nigerian enterprises.
Chairperson of the Botswana Stock Exchange, Neo Mooki, also urged African investors to participate in the refinery’s ownership.
Mooki, who said she had visited the refinery with Botswana’s Vice President and her team, described the facility as evidence of what African ambition could achieve when supported by capital and execution.
“Africa is not poor. It is unmonetised,” she said.
She urged Dangote and Nigeria’s capital market to extend the ownership opportunity beyond Nigeria to investors across Africa.
According to her, the refinery IPO provides an opportunity for Africans to own a stake in one of the continent’s most significant industrial assets.
