Dangote Petroleum Refinery & Petrochemicals FZE has opened a portion of its initial public offering to investors across East Africa, with the regional tranche expected to raise as much as $300.4 million. The arrangement was set out in an information memorandum published on Wednesday after regulators in Kenya and Uganda cleared pathways for eligible investors in both countries to take part in the share sale.
The East African offer is sized at about 39 billion Kenyan shillings, to be raised through roughly 729 million Global Depositary Receipts priced at 53.50 shillings each. If fully subscribed, the tranche would account for almost 20% of the refinery's wider IPO target of at least $1.6 billion.
"The GDR offer is intended to provide investors within East Africa region with access to the Dangote Petroleum IPO," the information memorandum states. "Application has been made to list the GDRs on the Nairobi Securities Exchange."
Each Global Depositary Receipt represents one underlying share in Dangote Petroleum Refinery & Petrochemicals FZE. The minimum success threshold for the GDR offer is 50 million shillings, while the minimum subscription is 2,000 GDRs, with further subscriptions in multiples of 100. The application list closes on October 13, allotments are expected around November 12, and listing is scheduled for 15 business days afterwards.
Renaissance Capital (Kenya) Ltd and Lagos-based Renaissance Capital Africa are jointly advising the Kenyan offer, while Stanbic Bank is serving as custodian and receiving bank.
Kenya's Capital Markets Authority approved the GDR structure on Monday, allowing eligible local investors to participate through negotiable certificates representing shares in the Nigerian company. Uganda's Capital Markets Authority also authorised the promotion and distribution of the IPO to investors in that country. Kenya's regulator has further required Dangote Petroleum to maintain a minimum public free-float of 15% of the total issued GDR pool among investors in the country.
In Nigeria, the Aliko Dangote Foundation has introduced a Share Grant Initiative that could allow eligible tertiary students applying for the refinery IPO to receive an additional 10 shares at no cost.
