‘Capital Raising Hub In SADC’: Africa’s Richest Man Picks Botswana For History-Making IPO

Topline:

After much speculation and buzz, Nigerian industrialist and billionaire Aliko Dangote selected Botswana, the landlocked southern African nation, as the dual host for what is expected to be the continent’s largest-ever initial public offering (IPO), expected to open for trading by early December.

Key Facts:

• The listing follows the Botswana Stock Exchange’s (BSE) announcement of its first IPO in nearly a decade.
• Dangote is targeting around $1.6 billion to double the refinery’s capacity to 1.4 million barrels per day by the end of the decade, and the BSE hopes to raise about $500 million of that.
• Investors in other Southern African Development Community (SADC) countries can subscribe through their local brokers and exchanges.
• Shares will trade 1:1 with the Nigerian exchange, and both will open simultaneously.
• Unlike a secondary listing, the deal will bring fresh capital to the BSE.

Botswana’s Moment

Having announced the intention for its first IPO in nearly a decade a few weeks prior, the BSE is enjoying momentum, now set to be boosted by–if the numbers are anything to go by–Africa’s most prized listing: the Dangote Petroleum Refinery and Petrochemicals IPO.

Dangote is aiming for some $1.6 billion to double processing capacity from 700,000 barrels per day.

Key Quotes

Dangote’s approval elevates Botswana as the IPO’s host venue for southern African investors.

Asked what this means for the BSE, the exchange’s CEO Aupa Monyatsi tells FORBES AFRICA he believes it cements the country as a “regional capital raising hub in the SADC”.

“Through a framework led by the Committee of SADC Stock Exchanges Secretariat, other neighboring countries can participate via their local brokers and exchanges; the subscriptions will then be aggregated and sent to Access Bank Botswana,” Monyatsi says, adding that the funds will then be sent to Access Bank in Nigeria, who buys and holds the shares on behalf of SADC investors.

Ringing The Bell

By adopting a 1:1 ratio with the Nigeria Stock Exchange, the two nations will ring the bell simultaneously when the Dangote IPO opens for trading “in late November or early December,” Monyatsi says, confirming that unlike a secondary listing, this will inject fresh capital into the BSE.