EXCLUSIVE-Nigeria's Dangote seeks around $1.5 billion with refinery IPO, sources say

Nigeria's Dangote Group plans to price the initial public offering of its refinery unit at 525 naira ($0.40) per share, potentially raising about $1.5 billion in ‌Africa's biggest-ever share sale, two sources with direct knowledge of the deal told Reuters on Friday. The listing will test investor appetite for one of the continent's most ambitious industrial projects. The 650,000-barrel-per-day refinery, built at a cost of about $20 billion on the outskirts of Lagos, has transformed Nigeria's fuel market and emerged as a major ‌beneficiary of supply disruptions linked to the Iran war, exporting jet fuel across Africa and into Europe.

The company plans to sell 4.1 billion shares, ‌the sources said, speaking on condition of anonymity because the terms remain private. They did not say what stake in the refinery the sale would represent. The order book for the offer is set to open on September 14, a third source said, in line with a time frame indicated by Aliko Dangote, the group's majority shareholder, on Thursday.

Dangote Group declined to comment further. The refinery's ⁠majority shareholder ​is raising cash to fund a planned ⁠doubling of capacity to 1.4 million barrels per day, having already secured a $400 million underwriting commitment for the IPO.

A formal signing ceremony with the stock exchange to launch the deal will be ⁠held next week, two company sources told Reuters. AFRICA'S RICHEST MAN

The refinery's rapid growth has helped fuel investor interest in the share sale, market participants say. The IPO will include a ​so-called greenshoe option to sell around 15% more shares if demand exceeds supply, one of the sources said.

A private placement in July indicated a ⁠refinery valuation of $40 billion, but some investors and analysts say this appears high relative to other listed stand-alone oil refiners. Turkey's Tupras, which has a similar refining capacity spread across four sites, has a ⁠market ​value of about $12 billion, while New York-listed HF Sinclair, with capacity of roughly 678,000 bpd, is valued at about $16 billion.

Aliko Dangote told a business meeting in Botswana on Thursday that he aimed to build the refinery, which does not publicly disclose detailed financial results, into one of Africa's largest companies, ⁠generating more than $12 billion in earnings before interest, tax, depreciation and amortisation (EBITDA). Dangote, Africa's richest man with a net worth estimated at between $31 billion and $35 billion, said ⁠he wanted investors from across the continent ⁠to participate in the offering, including Nigerian retail investors.

"This is not a Nigerian listing. It's an African listing, and we are going to pay everybody, including the Nigerian listing, in dollar terms," he said in the Botswana speech. ($1 = 1,320.2300 ‌naira)