Business
Dangote Cement Plans Global Share Offer
Dangote Cement, the country’s biggest cement maker, plans to sell a 20 per cent stake through a global share offering in the next 18 months as it gears up for a construction boom in Africa, a senior executive said on Monday.
Dangote Cement will list on the stock exchange on October 26 after a merger with local rival Benue Cement, in a deal valuing it at $14 billion and making it the country’s largest company by market capitalisation.
Chief operating officer, Kunle Alake, said the Nigerian Stock Exchange had given the firm two years to sell down a 20 per cent stake in the newly listed entity in order to comply with the minimum 25 per cent free float requirement.
The planned share offering will be one of the biggest ever by an indigenous company in sub-Saharan Africa.
“Preferably within 18 months, I think we should be able to complete the exercise. There would be a global offering most likely within the next 18 months,” Alake said in an interview.
“It will be an offer for sale, so Dangote Industries Limited will be divesting 20 per cent to meet the listing requirement … At this point, the decision is not to do a strategic placement … We are looking at making it open to every investor.”, he said.
Billionaire tycoon Aliko Dangote, is the majority owner of both cement firms through his holding company Dangote Industries, meaning the combined free float after the deal will be 4.1 per cent, well below the minimum requirement.
Dangote Cement plans to offer 13.5 billion naira ($90 million) worth of shares in Nigeria when trading begins in the new entity on October 26, which will take the free float up to five per cent.
Dangote Cement shares will begin trading at 135 naira next week, which would value the global offering at $2.8 billion.
Alake said the location of the offering was yet to be confirmed and that issuing global depository receipts (GDR) would be one option.
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