Nigerian pension fund administrators collectively applied for another $400 million to $500 million, equivalent to approximately ₦546 billion to ₦683 billion. Part of their demand was covered through an earlier private placement.
The figures were reported by Bloomberg, citing people familiar with the transaction who requested anonymity because the applications and proposed allocations remain private.
The applications do not mean the pension funds have been allocated the full amount requested. The refinery’s share offer was substantially oversubscribed, and regulators must approve the basis on which the available shares will be distributed among applicants.
Dangote could release more shares
The refinery received applications worth about ₦5.85 trillion, or approximately $4.3 billion, from nearly 3.8 million investors. That was close to three times the initial amount sought.
The company offered approximately 4.1 billion shares at ₦525 each, valuing the transaction at about ₦2.15 trillion before any over-allotment. The wider offer values the refinery at approximately $50 billion.
Even if the offer is increased to $2.1 billion, demand will still exceed the number of shares available.
Dangote could consider selling part of his existing holding through a secondary transaction to accommodate the pension funds’ applications.
Such a sale would differ from the IPO. Money raised through newly issued shares would go to the refinery, while proceeds from a secondary sale would go to the shareholder releasing the stock.
No decision on an additional sale has been announced, and Dangote is expected to retain control of the refinery after the listing.
South Africa’s largest asset manager targets Dangote
The Public Investment Corporation manages almost $220 billion, or approximately R3.7 trillion, in assets. Its portfolio includes the retirement savings of South African government employees.
A full $500 million allocation would give Africa’s largest money manager significant exposure to a refinery intended to reshape the continent’s petroleum market.
The Lagos complex currently has capacity to process about 650,000 barrels of crude oil daily, making it the world’s largest single-train refinery.
Dangote plans to more than double that capacity to 1.4 million barrels per day by 2029. Proceeds from the share offer are expected to support the estimated $14.3 billion expansion.
The refinery has also begun building a wider African distribution network, with projects and proposed investments covering Kenya, Namibia and several inland Southern African markets.
Nigerian pension funds received an exceptional waiver
Ordinarily, pension funds can invest in a company’s shares only when it has recorded taxable profits for at least three of the preceding five years and paid dividends or issued bonus shares during at least one of those years.
Dangote Refinery does not yet meet those operating-history and dividend requirements.
PenCom nevertheless approved an exception after considering the refinery’s economic importance, growth prospects and the record of its controlling shareholder, Dangote Industries Limited.
The regulator said the waiver applied only to this IPO and would not automatically extend to future public offers. Pension administrators must still comply with their internal investment policies, risk controls and fiduciary obligations to contributors.
Nigeria’s contributory pension system serves approximately 11 million members across 20 pension fund administrators. Their reported application for as much as $500 million represents a significant move into one of the country’s largest corporate transactions.
The final test will be how many shares they receive. The Securities and Exchange Commission must approve the basis of allotment before excess application funds are refunded and trading begins on the Nigerian Exchange.
Until that process is completed, the nearly $1 billion figure represents demand from the South African and Nigerian pension industries—not a completed investment.
Source: africa.businessinsider.com
