Dangote eyes second tranche of $685m bond to finance refinery
Dangote Industries Limited is finalising plans to borrow the balance of the N300 billion bond under which it raised N188 billion last July, with the proceeds set to go into the construction of the 650,000-barrels-per-day refinery project in Nigeria’s commercial hub, Lagos.
Afrinvest West Africa Ltd, the joint issuing house of the latest N112,415,455,000 bond, sent out a notice to investors on Monday of the imminent launch of the Dangote Industries series 2. The tenor for the offer is 10 years.
The required regulatory approvals are still being awaited but the offer will be open in a few days, according to Afrinvest.
Proceeds from the bond will be used to part-finance the Dangote Petroleum Refinery Project, which is scheduled to begin operations in the first half of 2023, after several delays due to supply chain issues triggered by the COVID-19 global pandemic.
Dangote Industries issued a Series 1 Bond offer on June 30 this year under its N300 billion debt issuance programme.
The deal comprised two tranches of seven and 10 years. Each tranche priced at the “higher range” of the initial price guidance, of 12.25 percent to 12.75 percent and 13.00 percent to 13.50 percent for each tranche respectively, according to Abiodun Keripe, managing director of Afrinvest Research and Consulting.
The bond was oversubscribed, with N10 billion demand for the seven-year tranche and N176 billion for the 10-year offering.
Although the Dangote refinery is yet to commence operations, the $2.5 billion petrochemical plant has been operational since March 22, 2022. With a capacity of 3 million tonnes per year, it is hoped that the plant will be able to fulfil local demand as well as earmark a proportion of production for export.
