Dangote Petroleum Refinery and Petrochemicals has raised about $2.5 billion from a private placement that was 3.7 times oversubscribed. The company announced this good news in a statement on Thursday.
They described the placement as Africa’s largest public primary equity private placement by value. This deal led to the issuance of about $2.5 billion in new equity. It is also the first time the refinery has raised capital with outside investors apart from its current shareholders.
"Dangote Petroleum Refinery and Petrochemicals FZE (DPRP or the Enterprise) today announces the successful completion of its landmark Private Placement, which achieved 3.7 times subscription relative to the initial offer size and resulted in the issuance and allotment of approximately US$2.5 billion in new equity," the statement said.
The company explained that the funds would help to expand its refinery and petrochemical complex. It will also strengthen their balance sheet and give them more financial flexibility for future growth.
This announcement came about a month after Nigeria’s Securities and Exchange Commission (SEC) warned Nigerians about a fake initial public offering (IPO) of the Dangote Petroleum Refinery. The SEC said that no application for such an offer has been submitted or approved by them.
At that time, SEC showed concern over some registered capital market operators who were asking for advance subscriptions from investors for this fake offer.
The commission stated that no IPO application by the refinery has been filed with them or approved.
In May, Femi Otedola, the chairman and biggest shareholder of First HoldCo Plc, expressed plans to invest $100 million in the private placement of Dangote Petroleum Refinery during a tour of the facility.
The company mentioned that this new offer attracted various international and African institutional investors, as well as development finance institutions and strategic partners.
Included among the investors were Africa Finance Corporation (AFC) and India Infra Buildco, an investment vehicle supported by the African Export-Import Bank (Afreximbank), along with other institutional and individual investors, the statement said.
According to the company, the strong interest from investors shows their growing confidence in its long-term growth plans and operational success.
Aliko Dangote, President of Dangote Industries Limited and Chairman of Dangote Petroleum Refinery, said this transaction is a big step in widening the company’s shareholder base and supporting its plans for expansion.
He noted that the capital raised would work with funds generated internally and existing external financing to help the company grow.
Mr Dangote added that this investment shows the company’s commitment to boosting Africa’s refining and petrochemical capacity. It will also help reduce the continent's reliance on imported petroleum products and improve energy security.
David Bird, the Managing Director and Chief Executive Officer of Dangote Petroleum Refinery and Petrochemicals, said the huge interest from investors reflects their confidence in the refinery’s performance, ability to execute plans, and leadership.
The company said that this successful fundraising has strengthened its platform for long-term value creation. It also positions them to continue with their expansion strategy.
Dangote Petroleum Refinery, which can refine 650,000 barrels per day, is the largest refinery in Africa. It has been increasing its supply of refined petroleum products to Nigeria and other African markets to help reduce the continent’s dependence on fuel imports.
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