By Jeremy Gaines and Christian Hiller von Gaertringen
It will be the biggest IPO the African financial markets have ever seen: Nigerian business tycoon Aliko Dangote announced last week that he is targeting an initial public offering (IPO) of a slice of the capital of Dangote Group’s oil refinery in September. The new facility that hit its full 650,000 barrels (119 liters) per day capacity in February and is busy, among other things, supplying much-needed jet fuel to Europe. It is located in the Lekki Free Zone near Lagos. Aliko Dangote further said the company has attracted about $2 billion in private investor offers but they would not be allowed to take up the entire stake being floated in the IPO.
The big question will be whether this IPO proves to be a game changer for African stock markets. This question is of very personal interest to us as well. For Capital News Africa launched five years ago with the mission of raising the global profile of African stock markets. However, we grudgingly found out that these markets attract limited interest. Regrettably, the trend has for a long time run more in the direction of de-listings rather than an expansion of the trading boards.
Little concrete information is currently available regarding the largest IPO in Africa in many years. In this blog, we show investors what they need to know—which facts are reliable and which rumors are circulating.
To preempt one answer: Yes, we believe that the IPO of the Dangote Petroleum Refinery, one of the eight divisions in the Dangote Group, could be a gamechanger for African equity markets. However, this answer should be a little more balanced. Behind the paywall, you will read what investors should know about this groundbreaking IPO.
What awaits you behind the paywall:
The factors you need to consider during the evaluation.
Are refineries a good investment?
Why this IPO is not necessarily good for Africa
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