Dangote Petroleum Refinery has extended its initial public offering (IPO) by 10 days to give investors from other African countries more time to participate in the share sale, a company executive and an adviser to the offer have said.
The offer, launched about a month ago, was initially scheduled to close on Tuesday. The extension is expected to widen participation beyond Nigeria as the refinery seeks funds for its expansion.
The share sale is targeting members of the public and could raise up to $2.1bn, potentially making it Africa’s largest IPO.
The offering has attracted strong interest from retail investors, with the publicity surrounding the sale drawing attention to stock market investment in Nigeria. However, the extension is also intended to give prospective investors in other African countries additional time to take part.
Citi’s head of banking for sub-Saharan Africa, Akin Dawodu, said the public interest generated by the offering could help encourage more Africans to invest through their local stock exchanges.
“The Dangote Refinery here in Nigeria captured the public imagination in a very real way,” Dawodu told Reuters, adding that such enthusiasm was important for markets that had suffered from low trust and liquidity.
“Something like (Dangote) brings people back to the market,” he said.
The offering has also prompted debate among investors and analysts over the refinery’s valuation, with some questioning whether the share price adequately reflects its growth prospects.
Despite those concerns, proponents say greater participation in the equity market could help mobilise domestic savings for major projects and reduce reliance on borrowing.
Dawodu said African economies needed to unlock more local capital to finance infrastructure and development.
“The size of the stock exchanges across Africa, (Johannesburg) excepted, is very small relative to the capital available,” he said. “We have to find a way to unlock that.”
The IPO comes amid wider efforts by African governments and development institutions to draw on retail savings, pension funds and insurance assets to finance infrastructure and economic growth.
The extension gives investors outside Nigeria additional time to consider the offer, while placing the refinery’s share sale at the centre of discussions about the capacity of African capital markets to finance large-scale industrial projects.
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