Dangote Industries Ltd is actively seeking further opportunities to raise capital from global investors, building on its recent debut in international markets. The industrial conglomerate is considering the bond market to support the growth of key businesses, particularly in the energy and fertilizer sectors, according to Murat Erden, Dangote’s chief financial officer.
This strategic move follows the successful private bond placement by Dangote Fertiliser Ltd in April, which secured $750 million. Dangote Fertiliser operates Africa’s largest urea plant and this financing is crucial for its expansion plans.
The group, owned by billionaire Aliko Dangote, has diverse interests including cement and infrastructure. Dangote Cement Plc reported nearly $3.2 billion in revenue last year, while Dangote Sugar Refinery Plc generated approximately $610 million. The group’s oil refinery, the largest in Africa, aims to significantly increase its capacity from 650,000 barrels per day to 1.4 million by 2028.
Aliko Dangote has outlined an ambitious investment target of at least $40 billion over the next five years. These plans include developing Nigeria's largest deep seaport, boosting urea output to 12 million tons by 2030, diversifying into liquefied gas, and constructing a 20,000-megawatt power plant.
Erden stated that the company is opportunistically evaluating bond issuances to align the financing of certain subsidiaries with their dollar revenues and to fund long-term capital investment programs. Additionally, plans are underway to sell approximately 10% of the oil refinery through an Initial Public Offering (IPO) on multiple African stock exchanges this year.
While several Dangote entities are listed on Nigerian stock exchanges, this recent bond transaction marks the group's first foray into international capital markets. Stefan Weiler, head of debt capital markets for Central Europe, the Middle East and Africa at JPMorgan Chase & Co., noted the significance of this event, which was arranged alongside Bank of America.
The private placement allowed Dangote Fertiliser to select fund managers who could provide strategic support not only to the fertilizer business but also to other Dangote companies. Weiler highlighted that these chosen investors could become core stakeholders for the group's future endeavors.
The bond, initially issued at par, has since seen its value increase, trading at approximately 101.7 cents on the dollar, according to Bloomberg data.
