Aliko Dangote, Africa’s wealthiest man, is having two very different conversations with investors. At home, they’re queuing to buy shares in his refinery. In London, his cement company has decided to call off the party.
What’s happening? On Tuesday, Dangote Cement abandoned plans for a secondary listing on the London Stock Exchange (LSE), Bloomberg reported, citing market conditions and strategic priorities. The company had been preparing to sell about $1 billion worth of shares, even hosting investors in London, the United Kingdom, in September. It hasn’t announced a new date.
Meanwhile, back home:Bloomberg reported on Tuesday that Dangote’s refinery attracted $4.1 billion in share applications, nearly three times the $1.6 billion it sought in Africa’s largest IPO. Talk about contrasting fortunes.
Explain like I’m new here. These are two different transactions. Dangote Cement already trades on Nigeria’s stock exchange. Its proposed London listing would have allowed existing shareholders, including Dangote Industries, to sell part of their holdings to international investors. The cement company wouldn’t receive the proceeds.
However, the refinery offered new shares to fund its expansion, including plans to double production capacity.
Zoom out: This isn’t necessarily evidence that foreign investors have lost interest in Dangote Cement. The company withdrew its offering before the listing, and market conditions can affect what investors are willing to pay. One transaction would have helped existing shareholders cash out, while the other invites investors to finance future growth.
And while the refinery has attracted strong demand, applications aren’t the same as money raised. Its final share allocations are still pending.