Dangote Refinery Unveils Currency Shareholders Will Receive Dividends After IPO
- Dangote Refinery shareholders could receive dollar dividends, backed by expanding export earnings
- Dangote executive defends the N525 IPO price as investors buy into an operating refinery
- Refinery targets 10 million shareholders while planning a three-year expansion to boost international exports
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Shareholders in Dangote Petroleum Refinery could receive dividends in US dollars, a senior company executive has disclosed as the company courts investors for its initial public offering (IPO).
Devakumar Edwin, Vice President of Dangote Industries Limited, said the plan was declared by the group's President, Aliko Dangote, and would be supported by the refinery's foreign exchange earnings from exports.
Source: Getty Images
Edwin disclosed this on Friday during a media tour and briefing at the refinery.
"My president has even declared that the dividends will be in foreign exchange, in dollars," Edwin said.
Export earnings to support dollar dividends
According to Edwin, the refinery's growing export business is expected to generate the foreign currency required to support dividend payments.
He said about half of the refinery's current production is exported, while almost all additional output expected from its planned expansion would be targeted at international markets.
The strategy, he explained, would provide a steady stream of foreign exchange for the company as production increases.
The dividend proposal could attract attention from Nigerian investors seeking exposure to dollar-denominated earnings, although actual dividend payments would depend on the company's performance and future dividend declarations.
Dangote executive speaks on N525 share price
Edwin also addressed concerns about the refinery's share price, currently offered at N525 under the IPO.
He expressed confidence that the stock would appreciate after listing and dismissed fears that the price could decline.
According to him, Dangote Industries deliberately waited until the refinery had been built, commissioned and was operational before opening ownership to public investors.
He said investors are therefore subscribing to an operating business rather than financing a project that has yet to commence production.
Edwin added that the refinery has released its first six months of operational results, giving prospective shareholders information with which to independently evaluate the investment.
Refining margins remain key to profitability
Addressing concerns about volatile crude oil prices following the US-Iran war, Edwin said the refinery's profitability is driven primarily by refining margins rather than the absolute price of crude.
He explained that petroleum product prices generally move alongside crude prices.
According to him, disruptions to supplies from Middle Eastern refineries could temporarily strengthen refining margins, although such additional gains would eventually ease.
He maintained that returns on the refinery's $20 billion investment remain on target.
Source: UGC
Dangote targets 10 million shareholders
Dangote Refinery is aiming for at least 10 million shareholders, with the minimum IPO subscription set at N5,250 to broaden participation among retail investors.
Edwin disclosed that refinery employees were also offered shares during the private placement, adding that he participated in the offer.
Meanwhile, the refinery's planned expansion is expected to be completed within three years.
Edwin said all required licences have been secured and most equipment ordered. He added that the expansion should cost slightly less than the original refinery because major supporting infrastructure, including the quarry, welding gases plant and port, is already available.
Dangote Refinery plans additional share sale
Legit.ng earlier reported that Billionaire industrialist Aliko Dangote has revealed plans to release significantly more shares in Dangote Petroleum Refinery to public investors, potentially widening ownership of the multibillion-dollar company beyond its initial public offering.
Dangote said the company could offer an additional 30% or more of its shares, particularly if demand for the ongoing IPO exceeds the number of shares currently available.
Source: Legit.ng
