Dangote refinery IPO plans depositary receipts for Botswana and Kenya, targets Egypt
Nigeria's Dangote oil refinery wants people in Botswana and Kenya to be able to buy into its $1.6 billion share sale, Semafor and BusinessDay reported. They would buy receipts that stand for the shares. The refinery is also trying to bring in buyers from Egypt, and the sale now runs until October 27.
The Dangote Petroleum Refinery plans to use depositary receipts to let investors in Botswana and Kenya take part in its $1.6 billion initial public offering, and it is also seeking to reach investors in Egypt, Semafor and BusinessDay reported Friday. Depositary receipts are securities traded on a local exchange that stand for shares listed in another country.
Semafor reported that the refinery is pushing to extend the share sale to Egypt using depositary receipts, the same tool it plans to use for investors in Botswana and Kenya. BusinessDay reported that Egypt is still at an exploratory stage. Omar Radwan, chairman of the Egyptian Exchange, said the bourse was exploring cooperation with Dangote Group to see whether Egyptian depositary receipts could be set up, BusinessDay reported.
Kenya's Capital Markets Authority approved a prospectus for a route through global depositary receipts on Oct. 5, and the receipts are expected to list on the Nairobi Securities Exchange, BusinessDay reported. Botswana was chosen to host the Southern African part of the offer, and receipts issued there are expected to begin trading on the Botswana Stock Exchange on Dec. 14, after the subscription period ends, BusinessDay reported. In Zimbabwe, the Financial Securities Exchange said in a notice to investors on Friday that subscriptions through the Botswana receipts can be settled within two business days after allocation, according to BusinessDay.
The sale opened in Nigeria on Sept. 14 and was first set to close on Oct. 13, but it now runs to Oct. 27, BusinessDay reported. Semafor reported that the extension is meant to give time to add more African stock exchanges. "We will extend the closing date because we want more of our African brothers and sisters to participate," billionaire owner Aliko Dangote said at the refinery on Monday, according to BusinessDay. Dangote said the offer had drawn subscriptions several times larger than its target, Semafor and BusinessDay reported.
The offer is Africa's largest IPO, with a hard cap of $2.1 billion and a minimum price of 40 cents a share, Semafor reported. Semafor reported that setting up the sale on each country's exchange has shown a need for simpler rules on investing across borders.
What we know: The refinery is using depositary receipts to reach investors in Botswana and Kenya and is seeking to add Egypt before the Oct. 27 close.
What we don't: Whether Egypt will approve a route, and how much the sale will raise.
Where outlets agree Semafor and BusinessDay report that the Dangote refinery plans depositary receipts for investors in Botswana and Kenya and is seeking to bring Egypt into its $1.6 billion share sale.
Where they differ Semafor says the refinery is pushing to offer depositary receipts in Egypt as it plans to in Botswana and Kenya, while BusinessDay says Egypt remains at an exploratory stage with no operational route yet.