Dangote Refinery to reward retail investors with extra shares in first two years

Dangote Petroleum Refinery & Petrochemicals FZE will give eligible retail investors one extra share for every 10 shares they hold for a full year in each of the first two years after the company lists.

Chuka Eseka, the Group Managing Director and CEO of Vetiva Capital Management, shared this news while discussing the refinery’s public offer on Monday.

The Dangote Refinery opened its order book on Monday for its $1.6 billion initial public offering (IPO). This month-long exercise aims to raise capital from retail investors across Africa.

The offer includes 4.1 billion shares priced at N525 each and will end on 13 October, as stated in the offer prospectus.

Mr Eseka explained that under the retail incentive program, investors who buy a minimum of 10 shares and hold them for 12 months will receive one extra share.

If they keep their shares for another 12 months, they will earn a second extra share. This means eligible investors can earn up to two additional shares over the two years.

He noted that the incentive program aims to encourage Nigerians to invest in the offer and hold their shares for the long term.

“It’s a retail incentive program. To be eligible, you need to subscribe to at least 10 units. If you hold those 10 units for 12 months, you will get one additional share.

“And if you hold for another 12 months, you receive another share. So you could earn up to two additional shares from this program,” he explained.

Mr Eseka added that investors who buy shares on the secondary market after the company is listed will not be eligible for the extra shares. The incentive is only for those who subscribe through the public offer.

The refinery’s public offer includes 4.1 billion ordinary shares at ₦525 each. It opened on Monday and will close on 13 October.

Investors can subscribe via digital investment platforms or through traditional stockbrokers, Mr Eseka noted.

He also mentioned that the offer has been certified Sharia-compliant after an independent Sharia assessment and screening.

This certification will help attract investors and funds interested in ethical or Sharia-compliant investments.

Mr Eseka stated that the money raised from the offer will help expand the refinery’s production capacity from 700,000 barrels per day to 1.4 million barrels per day.

He added that the funds will also support the development of new petrochemical units.

The Dangote Refinery is looking to raise funds through this offer to support its expansion plans.