Dangote set to raise additional N300b from capital market for refinery

Dangote Industries Limited (DIL) at the weekend opened an application list to raise N300 billion in medium-term debt funding from the Nigerian capital market.

The money is to finance the Dangote Petroleum Refinery being built in Lagos and due for completion in the first quarter of next year.

The firm, through a special purpose vehicle fund. Dangote Industries is offering two tranches of bonds to raise up to N150 billion, with a provision to scale up to the full size of its N300 billion registered bond issuance programme.

The book building- a register for prospective investors- for the N300 billion bond issuance is scheduled to close Thursday.

DIL is the sponsor of the bond issuance with Dangote Oil Refining Company Limited and Dangote Fertiliser Limited as co-obligors. Dangote is rated AA+ by GCR and AA (ngr) by Fitch.

The net proceeds of the bond issue will be used to further finance the group’s Dangote Petroleum Refinery project, expected to commence operations in the first half of 2023.

Dangote is offering a seven-year, fixed-rate senior unsecured bond with a pricing range of between 12.25 per cent and 12.75 per cent, maturing in 2029.

It is also offering simultaneously a 10-year fixed rate senior unsecured bond with a pricing range of 13.00 per cent and 13.50 per cent and a maturity date of 2032. The coupon for the bond will be paid on a semi-annual basis.

According to the offer document, the minimum subscription to the offer is 10,000 units at N1,000 per unit, representing a minimum subscription value of N10 million and thereafter in multiples of N1,000.

After the completion of the issue, the bond will be listed on FMDQ Securities Exchange Limited and Nigerian Exchange Limited.