Africa’s richest man Aliko Dangote to raise $723 million to finance $19-billion refinery plant in Lagos

Dangote Industries Limited, a diversified manufacturing conglomerate led by Africa’s richest man Aliko Dangote, has opened an application to raise up to N300 billion ($723 million) in medium-term debt funding from Nigerian investors to finance the completion of the Dangote Oil Refinery, a $19-billion integrated refinery and petrochemical complex.

The news comes nearly one month after the billionaire finalized key agreements and terms for a $750-million local bond program to help fund the completion of the project, which has stalled for years due to a lack of foreign currency, an ailing economy, COVID-19, and, most recently, financing issues.

Dangote Industries is “offering two tranches of bonds to raise up to N150 billion ($359 million), with a provision to scale up to the full size of its N300 billion ($723 million) registered bond issuance programs,” according to sources with knowledge of the planned debt financing.

The book-building period for the $723-million bond issuance is set to end on Thurs., June 30, and the fixed-rate senior unsecured bond will have a price range of 12.25 percent to 12.75 percent when it matures in 2029.

After the completion of the program, the bond will be listed on FMDQ Securities Exchange Limited and Nigerian Exchange Limited. The funds raised will be used to finance the Dangote Oil Refinery, which is being constructed in Lagos and is scheduled to be concluded in the first half of 2023.

When completed, the refinery’s pipeline infrastructure will process 540,000 barrels of Nigerian crude per day in the first phase of operation, increasing to 650,000 barrels per day later.

In addition to jet fuel, the refinery will produce 65 million liters of premium motor spirits (petrol), 15 million liters of diesel, and 3 billion standard cubic feet of gas per day.

Dangote Industries Limited is a Nigerian manufacturing conglomerate. It is Africa’s most diversified conglomerate, with a controlling stake in the continent’s largest cement company Dangote Cement, and a stake in future petrochemical industry players through its fertilizer and oil refinery businesses.

Dangote received a massive N293-billion ($704.1 million) dividend from his stake in Dangote Cement last Monday as part of the cash rewards paid to the company’s shareholders.