Africa’s richest man is taking his business deeper into global financial markets

The Dangote group, in its quest to explore options for raising capital to expand its conglomerate, is now looking at the prospect of more dollar bond sales.

• Dangote Group is considering issuing more dollar bonds to finance its expansion projects.
• Their fertilizer arm recently raised $750 million through a private bond sale, marking its first big international market step.
• Over the next five years, the group intends to invest at least $40 billion in projects like building Nigeria’s largest deep-seaport and expanding into LNG and power generation.
• The company also plans to sell 10% of the oil refinery through an IPO on African stock exchanges, aiming to deepen relations with international investors.

The move is subsequent to Dangote Fertiliser Limited raising $750 million through a private bond issue last month, marking the company’s first significant entry into international financial markets.

To fund long-term expansion projects and better match finance with operations that earn revenue in dollars, the group is now thinking about issuing more bonds, said Dangote’s chief financial officer, Murat Erden, who spoke to Bloomberg.

Owned by Africa’s richest man, Aliko Dangote, the conglomerate plays a major role in Nigeria’s economy.

Last year, its cement division generated about $3.2 billion in revenue, while its sugar activities earned approximately $610 million.

The company’s vast oil refinery, which is already the largest in Africa, is also scheduled to undergo significant growth.

The current processing capacity is 650,000 barrels per day, but plans are ongoing to increase that figure to 1.4 million barrels per day by 2028.

Dangote’s goals go beyond refining and fertilizer manufacture.

Over the next five years, the Nigerian billionaire intends to invest at least $40 billion in new companies and development projects.

These include building Nigeria’s largest deep-seaport, expanding urea production capacity to 12 million tons per year by 2030, entering the liquefied natural gas market, and constructing a 20,000-megawatt power plant.

Plans to raise funds also include selling about 10% of the oil refinery in an IPO on multiple African stock exchanges this year.

The bond, which was sold to a small group of funds, marked an important step for Dangote “in establishing a long-term presence in international capital markets,” Erden said, deepening ties with investors who could help finance the group’s businesses.

DON’T MISS THIS: Dangote refutes needing help from other Nigerian billionaires and falling out with Elumelu

Statistical price data compiled by Bloomberg indicates that the bond, originally issued at par approximately two weeks ago, is currently valued at approximately 101.7 cents on the dollar.