Dans le but de relancer le développement de la plus grande raffinerie de pétrole d’Afrique, Dangote Industries cherche à lever 300 milliards de nairas nigérians (723 millions de dollars).
The company made a bid over the weekend to raise nearly N300 billion in medium-term debt financing from Nigerian investors as it seeks to complete construction of the refinery, The Nation reported.
Once development operations are completed in the first quarter of next year (2023), Africa's largest refinery will process about 540,000 barrels of Nigerian crude per day, according to the specialist energy platform.
Financing the largest oil refinery in Africa
The company, through a private fund, is offering two tranches of bonds to raise about N150 billion each, as part of its N300 billion debt issuance program.
The net proceeds of the bond issue will be used to finance Dangote's refinery project, which is scheduled to start operations in the first half of 2023, according to the specialized energy platform.
This comes nearly a month after the completion of key agreements and terms of the $750 million local bond program to help finance the completion of the project, which has been stalled for years due to a shortage of foreign currency, the faltering economy, the coronavirus, as well as financing problems.
A report published by the international credit rating agency "Fitch" said the largest shareholder of the Dangote refinery, Africa's richest man, Aliko Dangote, does not have the necessary financing to develop the refinery and needs to raise $1.1 billion to complete the project and operate it by 2023.
Dangote is offering a fixed rate unsecured bond with a price range of 12.25% to 12.75% with a 7-year maturity, maturing in 2029.
The second tranche has a 10-year term with a price range of 13% and 13.50%, maturing in 2032, and bond interest will be paid on a semi-annual basis.
The minimum subscription for the offer is 10,000 units, at a price of N1,000 per unit. Upon completion of the program, the bond will be listed on the FMDQ and Nigerian stock exchanges.
Dangote Industries Limited (Del) of Nigeria is responsible for the bond issue with Dangote Oil Refining and Dangote Fertilizer Limited as commitment partners.
The group's portfolio is diversified and includes many industries, including cement, sugar, salt, packaging, energy, fertilizers and petrochemicals.
Currently, 3 business activities - cement, sugar and salt - contribute to the majority of the group's profits. Dangote is rated AA+ by the African rating agency GCR and AA by Fitch.
The Dangote refinery, the largest oil refinery in Africa, is expected to be completed in the first half of 2023.
Once completed, it will be able to process 540,000 barrels of Nigerian crude per day during the first phase of operation, increasing to 650,000 barrels per day.
In addition to jet fuel, the refinery will produce 65 million liters of gasoline, 15 million liters of diesel and 3 billion cubic feet of gas per day.
The refinery will help solve the country's oil crisis represented by fuel subsidies and the persistent lack of supply, as Nigeria relies on imported fuel to meet its needs, according to what has been monitored by the specialized energy platform.
After the country experienced a decline in oil production for several months, production in May increased by 70,000 barrels per day, averaging 1.42 million barrels per day.
The Organization of the Petroleum Exporting Countries (OPEC) has set a target of 1.772 mb/d for June, down from 1.735 mb/d.
However, the country is struggling to meet the OPEC quota amid rising crude theft, so the planned refinery capacity will boost Nigerian production.