South Africa’s state-owned asset manager wants an R8.43 billion slice of the richest man in Africa’s IPO

Africa’s biggest money manager and Nigerian pension-fund administrators applied for almost $1 billion (R16.85 billion) of shares in Dangote Petroleum Refinery and Petrochemicals FZE, according to people familiar with the matter. 

The Public Investment Corporation (PIC) asked for about $500 million (R8.43 billion) of shares in the initial public offering (IPO), said the people who asked not to be identified, as the information is still private.

The PIC oversees almost $220 billion (R3.7 trillion) in assets, including pensions for South African state workers.

Dangote refinery seeks to raise between $1.6 billion (R27 billion) and $2.1 billion (R35.4 billion) in the continent’s biggest IPO to date.

Aliko Dangote, Africa’s richest man, could consider selling down some of his own stake in his Lagos refinery to meet the request in a secondary sale, said the people. 

Nigerian pension administrators operating in the nation’s Contributory Pension Scheme system have applied for about $400 million to $500 million of shares in the continent’s top oil refinery.

Part of this was covered by an earlier private placement, said the people, declining to identify the funds.

Dangote didn’t respond to a request for comment. The PIC declined to comment. A spokesperson for the Pension Fund Operators Association of Nigeria, the umbrella body for the retirement-fund industry, didn’t respond to a request for comment.

The IPO values the processing complex at about $50 billion, with the company receiving close to 4 million unique subscription applications. 

The Nigerian billionaire might not have met his target of 10 million retail investors, but the unique applications he received are comparable to the 5.1 million individual subscribers to Saudi Aramco’s record-breaking 2019 IPO.

It also dwarfs the roughly 840,000 investors who applied for shares in the landmark 2008 sale of stock in the Kenyan wireless carrier Safaricom, then one of Africa’s largest transactions.

Dangote launched the IPO on 14 September, offering 4.1 billion shares at 525 naira each. 

The refinery attracted about 5.85 trillion naira ($4.3 billion) of applications for shares, Bloomberg reported earlier this week.

The money raised will go toward funding a plan to double the processing capacity of the complex – one of Africa’s most strategic industrial assets – to 1.4 million barrels a day.

Nigeria’s Securities and Exchange Commission is expected to sign off on Dangote’s allotment of the shares on 17 November. 

Trading will start 15 business days after that, according to the prospectus, which will likely be on 8 December, though the company is targeting the start of trading by the end of this month, subject to approvals.