Dangote Refinery Says Dividends Could Be Paid in Dollars as IPO Opens

Shareholders in Dangote Petroleum Refinery could receive their dividends in US dollars, a senior company executive has said, as the refinery courts investors for its initial public offering.

Devakumar Edwin, Vice President of Dangote Industries Limited, disclosed the plan on Friday during a media tour and briefing at the refinery. He said the arrangement was declared by group President Aliko Dangote and would be backed by the refinery's foreign exchange earnings from exports.

"My president has even declared that the dividends will be in foreign exchange, in dollars," Edwin said.

Exports to fund dollar payouts

Edwin said about half of the refinery's current production is exported, while almost all additional output expected from its planned expansion will be targeted at international markets. That strategy, he explained, would give the company a steady stream of foreign exchange as production rises.

The proposal may draw Nigerian investors looking for exposure to dollar-denominated earnings. Actual payouts would still depend on the company's performance and future dividend declarations.

N525 IPO price defended

Edwin also addressed concerns about the refinery's share price, currently offered at N525 under the IPO. He expressed confidence that the stock would appreciate after listing and dismissed fears that the price could fall.

He said Dangote Industries deliberately waited until the refinery had been built, commissioned and was operating before opening ownership to public investors. Investors are therefore subscribing to an operating business rather than financing a project that has yet to start production.

Edwin added that the refinery has released its first six months of operational results, giving prospective shareholders information with which to independently assess the investment.

On volatile crude oil prices following the US-Iran war, he said the refinery's profitability is driven mainly by refining margins rather than the absolute price of crude. Petroleum product prices generally move alongside crude prices, he noted. Disruptions to supplies from Middle Eastern refineries could temporarily strengthen refining margins, though such extra gains would eventually ease. He maintained that returns on the refinery's $20 billion investment remain on target.

Ten million shareholders targeted

Dangote Refinery is aiming for at least 10 million shareholders, with the minimum IPO subscription set at N5,250 to broaden participation among retail investors. Edwin disclosed that refinery employees were also offered shares during the private placement, adding that he participated in the offer.

The refinery's planned expansion is expected to be completed within three years. Edwin said all required licences have been secured and most equipment ordered. He added that the expansion should cost slightly less than the original refinery because major supporting infrastructure, including the quarry, welding gases plant and port, is already in place.

Aliko Dangote has also said the company could release an additional 30% or more of its shares to public investors, particularly if demand for the ongoing IPO exceeds the number of shares currently available.

For Nigerian investors, the dollar dividend plan is the headline attraction. If it holds, it offers a rare way to earn foreign currency from a local asset at a time when the naira's value remains a concern. But the payout is only a proposal tied to export earnings and future profit declarations, not a guarantee.