What to know
- The minimum application for the Dangote Kenya GDR offer has been cut from 2,000 GDRs to 10, lowering the entry point from Ksh.107,000 ($824) to Ksh.535 ($4.12), Renaissance Capital said.
- The change follows investor feedback and high demand and was approved by the Capital Markets Authority, according to the firm.
- The offer closes on 13 October, and the GDRs are expected to begin trading on the Nairobi Securities Exchange around 8 December.
Renaissance Capital has reduced the minimum subscription for the Dangote Kenya Global Depositary Receipt offer from 2,000 GDRs to 10, cutting the smallest possible application from Ksh.107,000 ($824) to Ksh.535 ($4.12) at the subscription price of Ksh.53.50 ($0.41) per GDR, the firm said in a statement on 9 October.
The reduction follows feedback from the investor community, high market demand and approval from the Capital Markets Authority, and is intended to broaden access to the offer, according to Renaissance Capital, which is acting as GDR issuer, lead transaction adviser and sponsoring broker. The new minimum matches the entry point for investors in Dangote Refinery’s IPO in Nigeria, the firm said, where the prospectus sets the minimum at 10 shares, or ₦5,250 ($4.00).
The offer is for up to 728,971,962 GDRs, each representing one underlying share in Dangote Petroleum Refinery & Petrochemicals FZE, with a target size of Ksh.39 billion ($300 million), according to the offer summary. The shares stay in custody in Nigeria with Stanbic Bank Kenya acting as custodian and receiving bank, while investors buy and sell the receipts on the NSE in shillings. The Nigerian Exchange remains the primary market for the shares, Renaissance Capital said. The programme is an unsponsored GDR, meaning the regulated institutions involved set it up rather than the company itself.
The CMA approved the offer on 5 October, and it opened the following day. The GDRs are to be listed on the NSE’s Main Investment Market Segment, subject to approval or no-objection from Nigeria’s Securities and Exchange Commission, according to the statement.
Investors with a Central Depository and Settlement Corporation account can apply through the USSD code 483250#, the e-portal at dangotegdr.e-offer.app or an authorised selling agent, and those without an account can open one through the portal, Renaissance Capital said. Applications close at 1 p.m. on 13 October and payment at 5 p.m., according to the offer summary, with bank transfers to Stanbic Bank due by 11 October and M-Pesa payments accepted until 13 October.
The structure carries no capital gains tax, compared with the 30% applicable to direct holdings of Nigerian equities, subject to applicable tax rules, according to the offer summary. Institutional investors can receive dividends in US dollars or shillings, and voting rights and corporate actions are passed through to GDR holders via the issuer, the summary states.
What to watch
- The offer closes on 13 October, with applications due by 1 p.m. and payment by 5 p.m., according to the offer summary.
- The CMA’s no-objection to allotment is expected on 11 November, with GDRs credited to investors’ CDSC accounts 15 business days after allotment, according to the indicative timetable.
- Trading on the NSE is expected to start around 8 December, subject to SEC Nigeria’s approval or no-objection.
Dollar figures use the Central Bank of Kenya’s (CBK) rate of Ksh.129.89 to the dollar on 7 October, and the Nigerian minimum uses the prospectus conversion of $0.40 per share.
Before publishing, note two points from the documents: the press release says the offer closes at 5 p.m., while the offer summary splits it into a 1 p.m. application deadline and a 5 p.m. payment deadline, so the piece reports both; and the summary describes all dates as indicative and subject to change.