Page 9 - DMEA Week 29 2022
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DMEA FINANCE & INVESTMENT DMEA
Dangote raises funds
through bond offering
AFRICA NIGERIA’S Dangote Industries Ltd closed a loan signed in November with the Cairo-based
successful bond issuance this week, raising African Export-Import Bank (Afreximbank)
NGN187.6bn ($452mn) on the local stock – which is also supporting the renovation and
exchange. upgrade of Port Harcourt.
The company, which is developing a 650,000 For NNPC, the deal is an important part of its
barrel per day (bpd) refinery at Lekki, near new strategy for the downstream sector, follow-
Lagos, issued the Series 1 Bond offer at the end ing decades of poor performance. However, the
of last month as part of its NGN300bn ($722mn) company admits that Dangote Industries’ presi-
debt issuance programme. dent and CEO Aliko Dangote was not keen on
A seven-year unsecured bond was offered NNPC’s involvement.
with a pricing range of 12.25-12.75%, with the Speaking to This Day in mid-July, Kyari said
10-year bond priced at 13-13.5%, with each of the investment: “[Dangote] didn’t ask for it. It’s
achieving pricing towards the upper end of the our decision to take equity. We made this deci-
ranges. Dangote is rated AA+ by GCR and AA sion three years ago, much earlier. It’s not what
(ncr) by Fitch, and intends to use the proceeds in he wants, but they are also aware that they oper-
the finalisation of the refinery project. ate in a resource-dependent country. We made a
The offering was NGN10bn ($24mn) over- request and it’s the policy of government that we
subscribed and closed just under three weeks take interest in this refinery.”
after it was announced. Now that the first instalment has been paid,
Earlier in July, Nigerian National Petroleum local media outlet The Whistler quoted an
Corp. (NNPC) Ltd paid the first instalment to NNPC official as saying that payment of the
acquire its 20% stake in the Dangote refinery balance is subject to the facility’s start-up and is
under an agreement signed in August 2021. linked to crude supplies to Dangote.
This valued the project at around $14bn, below “We have made the payments. We paid $1bn,
the $15-16bn valuation previously touted. Term the balance is subject to plant start-up and tied
sheets were signed by NNPC and Dangote to crude supply. It was a very ingenious deal. It
Group, with talks understood to be ongoing locks market for our crude and puts no stress on
regarding the financing of the acquisition. payment, as we will pay only $2 on every barrel
Much of the funding was sourced from a supplied,” he added.
Week 29 21•July•2022 www. NEWSBASE .com P9
