Africa’s largest initial public offering is set to take a more pan-African shape with the Dangote Refinery’s push to extend the sale of its shares to Egypt.
The sale will involve the use of depositary receipts, the same instruments that will be used to offer ownership in the continent’s largest refinery to prospective shareholders in Botswana and Kenya.
The IPO aims to raise $1.6 billion through the sale that started mid-September in Nigeria. The company has imposed a hard cap of $2.1 billion, but has “received subscriptions amounting to more than three or four times” the target, billionaire owner Aliko Dangote said this week. A two-week extension on the subscription period to Oct. 27 is designed to accommodate efforts to add more African bourses to the process, he said.
Dangote set a minimum entry price of 40 cents per share to attract potential retail investors. Policymakers around Africa see in the IPO a sign that capital markets can be deepened by broad-based participation, but the process of creating sale instruments in individual stock exchanges has highlighted a need to simplify regulations to allow more cross-border investment on the continent.
