Kenyan investors are set to get an opportunity to invest in shares of Nigeria’s Dangote Petroleum Refinery and Petrochemicals through Global Depositary Receipts (GDRs) proposed for listing on the Nairobi Securities Exchange (NSE).
According to the offering details by Renaissance Capital Africa, the offer targets 728,971,962 GDRs, with each GDR representing one ordinary share in Dangote Petroleum Refinery and Petrochemicals FZE. The GDRs will be offered at KSh53.50 each, giving the offer a target size of KSh39 billion.
The offer will use an unsponsored inward GDR structure, and it is subject to regulatory approvals. Investors will be required to subscribe for a minimum of 2,000 GDRs, after which subscriptions can be made in multiples of 100.
The offer also has a minimum success threshold of KSh50 million. This means the underlying shares allocated under the approved methodology must be worth at least that amount, while applications received and fully paid before the closing date must also reach at least KSh50 million.
However, the GDRs will only be issued and listed if the required conditions are met. These include meeting the minimum success threshold and obtaining approval or no objection from Nigeria’s Securities and Exchange Commission to allow the GDRs to be listed on the NSE.
If the minimum threshold is not reached, the offer will be considered unsuccessful and application money will be refunded without interest. If the listing condition is not met, the GDRs will not be issued or listed.
Under the proposed arrangement, investors will continue to hold the underlying shares through an omnibus account maintained by the GDR issuer. Liquidity will then be provided through the sale of the underlying shares on the Nigerian Exchange.
Demand could also affect how the GDRs are allocated. If applications exceed the number of shares allotted to the issuer, the allocation may be scaled back after the required approval.
The issuer will consider factors such as demand, the composition of investors and the objective of creating a broad and diversified shareholder base. It will also consider aftermarket liquidity when determining the allocation.