The largest indigenous industrial conglomerate in Sub-Saharan Africa Dangote group has announced plans to have an Initial Public Offering (IPO) listing of both its fertilizer and refinery plant. The IPO is the first of its kind in Nigeria and if successful could set the stage for other companies to test the market.
The listing of the $2.5 billion fertilizer plant and $10 billion refinery capacity will be done differently as it will cut reliance on international markets for Africa’s largest oil producer, who imports more than 90 per cent of its fuel needs. The IPO is scheduled to commence after next year’s general election (early 2020).
Valuation of Refinery
BusinessDay estimates the potential market value of Dangote Refinery to be around $34.5 billion. This value was estimated using the average market valuation of some of the largest refiners in the world which are Exxon Mobil, British Petroleum, Shell, Petrochina, SINOPEC and Indian based Reliance based Industries Limited.
We estimated the market value of the refinery business as a standalone from the main entity by multiplying the percentage contribution of the refinery income to total revenue of the oil and gas companies with their total market capitalization. The average percentage contribution was 80.98 percent of total revenue.
We then estimated the average market value per barrel refined using the production capacity of the refinery and the estimated market capitalization of the refinery business. The average value per barrel refined was estimated to be $53,070 per barrel.
To obtain the market capitalization of Dangote Refinery we multiplied the production capacity of the refinery which is 650,000 barrels per day with the average market price per barrel refined which gave us an estimated market value of $34.5 billion.
Of the total firms used in the analysis, Dangote refinery had the smallest market value while the largest was Exxon Mobils refining operations which contributed 77.84 percent of revenues in 2017 with a daily refining capacity of up to 6.3 million barrels per day across multiple refineries around the world.
With 650,000 bpd Dangote refinery is one of the largest refineries in the world, behind the likes of Jamnagar refinery owned by Reliance Industries Limited which produces 1.2 million bpd.
Estimated Revenue
Nigeria a country of almost about 200 million people currently consumes roughly 35 million litres of petrol daily; Dangote’s Refinery facility is expected to produce about 50 million litres a day of petrol which implies the refinery will have about 15 million litters for export.
Dangote Refinery is expected to generate revenue of about N3.1 trillion from petrol in a full operating year which we arrived at by multiplying the expected production of 50 million litres a day of petrol by landing cost of petrol of N171 by 365 days.
Although, we also acknowledge that the landing cost of N171 might have increased due to higher oil prices and Dangote is expected to pump around 20,000 barrels a day from two shallow-water blocks, known as OML 71 and 72, located in the Niger River delta in south eastern Nigeria.
The refinery is also expected to produce about 15 million litres of diesel which will generate about N947 billion in a full operating year. We arrived at N947 billion by multiplying the 15 million litres by landing cost of diesel of N173 by 365 days. This means the Refinery could generate annual revenues of N4.04 trillion or $11 billion per annum.
Valuation of Fertilizer Plant
BusinessDay estimates the potential market value of Dangote Fertilizer plant to be estimated around $4.67 billion.
This value was estimated using the average market valuation US based
Nutrien limited and Norway based Yara International who are among the
largest fertilizer plants in the world and also generates 100 percent of
their revenue from fertilizer.
We estimated the market value per output of the Fertilizer plant as a standalone from the business by multiplying the percentage contribution of the Fertilizer income to total revenue of the Fertilizer companies with their total market capitalization.
We then estimated the average value of per output in the fertilizer
plants to be $1,556. To obtain the market capitalization of the
Fertilizer plant, we multiplied the production capacity of the
fertilizer plant which is 3 million metric tonnes per day with the
average market price per fertilizer output which gave us an estimated
market value of $4.67 billion.
“It will attract foreign investor’s attentions to Nigeria and also
further place the country on the worlds stage as investors will be
looking to tap into the huge opportunities in the oil and gas sector,
which is an area government have failed over the years,” Ayodeji Ebo CEO
at Afri-invest securities Limited said.
Currently being constructed on a 2, 200 hectares at the Lekki Free Trade
zone in Lagos, with capacity to refine 650,000 barrels of crude per
day, and a petrochemical plant of 750,000 metric tonnes of polypropylene
per annum, it is 13 times bigger than the Indorama Eleme Petrochemicals
Limited.
“The planned IPO will easy the issues of PMS, reduce importation of fuel and also reduce volatiles in terms of pricing,” Ebo told BusinessDay.
Projected to be the biggest refinery in Africa, it is also projected to have 1.5 times more capacity than the existing four oil refineries in the country, even if they are operating at 100 per cent while the 3 million metric tons a year capacity fertilizer plant located near the refinery will probably be producing its first batches of urea by the end of this year costing around $2.5 billion.
Ebo also noted that the planned IPO will be highly successful as Dangote is already a global brand and foreign investors will like to associates with the name.
Edwin Devakumar group executive director at Dangote Industries Ltd confirmed that the company has been in talks with oil traders including Royal Dutch Shell Plc, Vitol Group and Trafigura Group about supplying the refinery with crude and buying refined products.
BusinessDay contacted Shell a multinational oil firm working in Nigeria to confirm if they anticipating the Dangote refinery; “we can’t comment on speculated commercial talks with third parties,” a top official of Shell told BusinessDay by email.
The plant is designed to process light and medium grades of crude and produce fuels that meet European standards so that Dangote can sell them globally as Dangote is expected to start producing its own oil, partly to supply the refinery, within a few months. It aims to pump around 20,000 barrels a day from two shallow-water blocks, known as OML 71 and 72, located in the Niger River delta in south-eastern Nigeria.
“While Dangote took on a $3.3 billion syndicated loan, which Standard Chartered Plc arranged, most of the refinery and fertilizer projects are self-funded. Both units will probably be partly sold via initial public offerings eventually,” Devakumar said.
Dangote selected Engineers India Ltd. (ENGR) to do most of the detailed engineering work for the new plant. Construction contractors have yet to be appointed.
The Securities and Exchange Commission (SEC) on Sunday disclosed that it was unaware that telecommunications giant, MTN Nigeria Limited, has filed an application to it to review its plan to undertake an Initial Public Offering (IPO) in Nigeria’s capital market.
The SEC, in a statement sent to THISDAY in Abuja, explained that neither MTN Nigeria Limited nor any of its advisers or representatives has filed any application with it regarding the IPO.
It thus debunked media reports claiming it was holding back the telecommunications firm’s plan to undertake the IPO.
“The commission wishes to categorically state that the information contained in the said publication is false, misleading and without merit.
“Additionally, the commission would like to state that MTN Nigeria Limited to the best of the commission’s knowledge is a private company limited by shares, As at the date of this circular, neither MTN Nigeria Limited nor any of its advisers or representatives has filed any application with the SEC regarding the said IPO,” said the statement.
It added: “Given that there is no application from MTN before the commission, there could not have been a request by MTN or any of its representatives or advisers requiring any form of regulatory review.”
The SEC said it would welcome filings aimed at deepening and broadening Nigeria’s capital market and was ready to provide the necessary regulatory support to ensure such happened.
According to it, “If MTN finally files a formal and complete application with the commission, it would be treated with the usual diligence and urgency that is applicable to all such filings.”
“Furthermore, we wish to remind all capital market operators of their duty not to furnish information, which is false, and misleading in any material particular as the commission would not hesitate to take necessary regulatory actions on any erring market operator.
“The commission remains committed to its core mandate of investor protection and maintaining the integrity of the Nigerian capital market,” it added.
Last year, MTN group announced that its Nigerian business will be listed on the Nigerian Stock Exchange this year, by way of initial public offering (IPO). Significant progress has been recorded vis-a-vis the IPO, which is expected to be concluded next month.
We
establish a compelling investment case for MTNN, considering the
company�s impressive track record which is supported by scaled market
position and the first-mover advantage. Beyond that, it is difficult to
ignore the telco�s new growth initiatives - to be implemented by a sound
management team which could potentially propel earnings to new highs
over the medium term.
Nigeria�s telecommunication industry � quick facts
Facts
2018 CLOSURE OF REGISTER - DIVIDENDS AND BONUSES
Company |
Dividend/share |
Bonus |
Closure of Register |
AGM Date |
Payment Date |
Vitafoam Nigeria Plc |
N0.15 |
Nil |
19th – 23rd February 2018 |
8th March 2018 |
9th March 2018 |
Nigeria Energy Sector Fund |
N102 |
Nil |
19th – 23rd February 2018 |
N/A |
23rd February 2018 |
Nigerian Breweries Plc |
N3.13 |
Nil |
7th – 13th March 2018 |
20th April 2018 |
23rd April 2018 |
Transcorp Hotels Plc |
N0.1245 |
Nil |
7th March 2018 |
16th March 2018 |
19th March 2018 |
Total Nigeria Plc |
N14 |
Nil |
19th –23rd March 2018 |
21st June 2018 |
22nd June 2018 |
Africa Prudential Plc |
N0.40 |
Nil |
13th – 19th March 2018 |
27th March 2018 |
27th March 2018 |
United Capital Plc |
N0.35 |
Nil |
9th – 15th March 2018 |
23rd March 2018 |
28th March 2018 |
Nestle Nigeria Plc |
N27.50 |
Nil |
7th – 11th May 2018 |
22nd May 2018 |
23rd May 2018 |
Medview Airline Plc |
N0.03 |
Nil |
21st –27th March 2018 |
28th March 2018 |
3rd April 2018 |
NASCON Allied Industries Plc |
N1.50 |
Nil |
20th – 23rd April 2018 |
3rd May 2018 |
8th May 2018 |
Zenith Bank Plc |
N2.45 |
Nil |
4th – 9th April 2018 |
13th April 2018 |
13th April 2018 |
McNichols Consolidated Plc |
N0.03 |
Nil |
20th – 23rd March 2018 |
19th April 2018 |
24th April 2018 |
Guaranty Trust Bank Plc |
N2.40 |
Nil |
28th March 2018 |
10th April 2018 |
10th April 2018 |
Stanbic IBTC Holdings Plc |
N0.50 |
Nil |
29th March – 5th April 2018 |
19th June 2018 |
20th June 2018 |
Julius Berger Nigeria Plc |
N1.00 |
Nil |
4th – 6th June 2018 |
21st June 2018 |
22nd June 2018 |
Dangote Cement Plc |
N10.50 |
Nil |
16th – 20th April 2018 |
20th June 2018 |
21st June 2018 |
Access Bank Plc |
N0.40 |
Nil |
13th – 18th April 2018 |
25th April 2018 |
25th April 2018 |
GlaxoSmithKline Consumer Nig. Plc |
(Special Dividend) N7.10 |
Nil |
24th April 2018 – 4thMay 2018 |
24th May 2018 |
25th May 2018 |
(Normal Dividend): N0.40 |
|||||
Custodian & Allied Plc |
N0.32 |
Nil |
12th – 17th April 2018 |
24th April 2018 |
24th April 2018 |
Cadbury Nigeria Plc |
N0.16 |
Nil |
11th – 15th June 2018 |
6th July 2018 |
9th July 2018 |
UBA Plc |
N0.65 |
Nil |
10th April 2018 |
23rd April 2018 |
23rd April 2018 |
MRS Oil Plc |
Nil |
1 for 5 |
2nd – 6th July 2018 |
1st August 2018 |
Not Applicable |
Continental Re-Insurance Plc |
N0.14 |
Nil |
16th – 20th April 2018 |
25th April 2018 |
26th April 2018 |
CAP Plc |
N2.05 |
Nil |
28th May 2018 – 1stJune 2018 |
13th June 2018 |
14th June 2018 |
AXA-Mansard Insurance Plc |
N0.06 |
Nil |
24th April 2018 |
10th May 2018 |
10th May 2018 |
Newrest ASL Plc |
N0.18 |
Nil |
12th – 15th June 2018 |
27th June 2018 |
28th June 2018 |
11 Plc (Formerly Mobil Oil Plc) |
N8.00 |
Nil |
28th May – 1 June 2018 |
28th June 2018 |
2nd July 2018 |
Dangote Flour Mills Plc |
N0.20 |
Nil |
23rd – 27th April 2018 |
22nd June 2018 |
27th June 2018 |
UAC of Nigeria Plc |
N0.65 |
Nil |
15th – 18th May 2018 |
20th June 2018 |
21st June 2018 |
Pharma-Deko Plc |
N0.05 |
Nil |
7th – 11th May 2018 |
22nd May 2018 |
23rd May 2018 |
Law Union & Rock Insurance Plc |
N0.04 |
Nil |
27th April 2018 – 2ndMay 2018 |
3rd May 2018 |
5th May 2018 |
May & Baker Nigeria Plc |
N0.20 |
Nil |
23rd – 27th April 2018 |
31st May 2018 |
6th June 2018 |
FCMB Group Plc |
N0.10 |
Nil |
13th – 19th April 2018 |
27th April 2018 |
30th April 2018 |
Lafarge Africa Plc |
(Dividend from Pioneer Profit) N1.50 |
Nil |
23rd – 27th April 2018 |
16th May 2018 |
16th May 2018 |
Transnational Corporation of Nig Plc |
N0.02 |
Nil |
18th – 24th April 2018 |
30th April 2018 |
2nd May 2018 |
Okomu Oil Plc |
N3.00 |
Nil |
15th – 18th May 2018 |
12th June 2018 |
25th June 2018 |
Beta Glass Plc |
N1.07 |
Nil |
18th – 22nd June 2018 |
5th July 2018 |
6th July 2018 |
AIICO Insurance Plc |
N0.05 |
Nil |
21st – 23rd May 2018 |
24th May 2018 |
25th May 2018 |
Unilever Nig. Plc |
N0.50 |
Nil |
16th – 20th April 2018 |
10th May 2018 |
11th May 2018 |
The Frontier Fund |
(Proposed Coupon) N7.50 |
Nil |
23rd April 2018 |
N/A |
27th April 2018 |
Nigerian Aviation Handling Co. Plc |
N0.25 |
Nil |
3rd – 5th July 2018 |
20th July 2018 |
20th July 2018 |
Regency Alliance Insurance Plc |
N0.03 |
Nil |
30th April – 4th May 2018 |
24th May 2018 |
25th May 2018 |
Dangote Sugar Refinery Plc |
N1.25 |
Nil |
16th – 20th April 2018 |
21st June 2018 |
22nd June 2018 |
Sterling Bank Plc |
N0.02 |
Nil |
30th April – 4th May 2018 |
17th May 2018 |
17th May 2018 |
Presco Plc |
N2.00 |
Nil |
9th – 13th July 2018 |
25th July 2018 |
26th July 2018 |
Rak Unity Petroleum Company Plc |
N0.10 |
Nil |
23RD – 27TH July 2018 |
16TH August 2018 |
16TH August 2018 |
Berger Paints Plc |
N0.50 |
Nil |
7TH - 11TH May 2018 |
7TH June 2018 |
8TH June 2018 |
Eterna Plc |
N0.40 |
Nil |
24TH – 28TH May 2018 |
19TH June 2018 |
20TH June 2018 |
Caverton Offshore Support Group Plc |
N0.15 |
Nil |
26TH April 2018 |
8TH May 2018 |
8TH May 2018 |
B.O.C. Gases Plc |
N0.20 |
Nil |
4TH – 11TH June 2018 |
28TH June 2018 |
28TH June 2018 |
Learn Africa Plc |
N0.14 |
Nil |
9TH – 13TH July 2018 |
2ND August 2018 |
3RD August 2018 |
Consolidated Hallmark Insurance Plc |
N0.02 |
Nil |
7TH – 11TH May 2018 |
22ND May 2018 |
22ND May 2018 |
Aluminium Extrusion Industries Plc |
N0.085 |
Nil |
13TH – 17TH August 2018 |
21ST September 2018 |
24TH September 2018 |
FBN Holdings Plc |
N0.25 |
Nil |
7th – 11th May 2018 |
15th May 2018 |
16th May 2018 |
Infinity Trust Mortgage Bank Plc |
N0.02 |
Nil |
10th – 17th May 2018 |
24th May 2018 |
30th May 2018 |
Vetiva S & P Nig. Sovereign Bond ETF |
N12.50 |
Nil |
26th April 2018 (Record date) |
N/A |
4th May 2018 |
NPF Microfinance Bank Plc |
N0.17 |
Nil |
4th – 8th June 2018 |
28th June 2018 |
28th June 2018 |
Fidelity Bank Plc |
N0.11 |
Nil |
14th – 18th May 2018 |
25th May 2018 |
25th May 2018 |
Vetiva Griffin 30 ETF |
N0.25 |
Nil |
26th April 2018 (Qualification date) |
N/A |
4th May 2018 |
Seplat Petroleum Dev. Co. Plc |
US$0.05 |
Nil |
17th May 2018 |
Interim Dividend |
8th June 2018 |
Omoluabi Mortgage Bank Plc |
N0.01 |
Nil |
21st – 25th May 2018 |
26th July 2018 |
1st August 2018 |
Capital Hotel Plc |
N0.05 |
Nil |
11th – 15th June 2018 |
27th June 2018 |
4th July 2018 |
Lasaco Assurance Plc |
N0.04 |
Nil |
4TH – 8TH June 2018 |
21ST June 2018 |
5TH July 2018 |
Cement Company of Northern Nig. Plc |
N1.25 |
Nil |
18th – 22nd June 2018 |
28th June 2018 |
29th June 2018 |
Smart Product Nigeria Plc |
N0.10 |
Nil |
30TH July – 3RD August 2018 |
30TH August 2018 |
21ST September 2018 |
NASD OTC
New traders join NASD
OTC
Seven authorised traders joined the NASD OTC market this week,
(July 7, 2015) bringing the total registered traders of all participating
institutions to 163
Seven authorised traders joined the NASD
OTC market this week,
(JULY 7, 2015) bringing the total registered traders of all participating
institutions to 163.
This growth is expected and indicates an increase in investors’
choice of brokers who are empowered to deliver above board services to
investors in unlisted securities in Nigeria.
These traders can advise and transact on behalf of their clients
on the NASD OTC platform.
These individuals firms who have successfully completed their
membership requirements with the NASD OTC and were inducted to trade on the market
include: Covenant Securities and Asset Mgt Limited, Dynamic Portfolio Limited, Eurocomm Securities Limited,
Interstate Securities Limited and Readings Investment Limited.
NASD is a promoter of a trading network that eases secondary
market trading of all security of
unquoted public companies primarily in Nigeria but with a focus on the West African region.