Dangote Refinery is set to sell a 12.7 percent stake in 2024 to service loans, according to a report released by Fitch Ratings.
Fitch noted that the Nigerian National Petroleum Company Limited (NNPC) initially planned to purchase a 20 percent stake in the refinery. However, the NNPCL’s choice not to acquire an additional 12.75 percent by June 2024 might affect Dangote’s loan servicing capabilities.
In 2021, NNPCL acquired a 7.25 percent stake in the refinery for $1 billion, with an option to buy another 12.75 percent by June 2024.
However, the national oil firm decided against this acquisition. “Since the option has not been exercised, the group plans to divest a 12.75 per cent stake in DORC in 2024,” Fitch stated.
“The group intends to service its significant syndicated loan maturing in August 2024 from the equity divestment. However, timely divestment and meeting the imminent maturity are highly uncertain in our view.”
Alhaji Aliko Dangote, President of the Dangote Group, clarified in July that NNPC holds only a 7.2 percent stake in the refinery, contrary to the widespread belief of a 20 percent stake.
He stated, “The agreement was actually 20 per cent which we had with NNPC, and they did not pay the balance of the money up till last year; then we gave them another extension up till June (2024), and they said that they would remain where they have already paid, which is 7.2 per cent. So NNPC owns only 7.2 per cent, not 20 per cent.”
NNPC confirmed this position, explaining its decision not to increase its investment in the refinery. “NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals. The decision to cap its equity participation at the paid-up sum was made and communicated to Dangote Refinery several months ago,” stated Olufemi Soneye, an NNPC spokesperson.
Former Minister of Education, Oby Ezekwesili, has called for an independent audit to understand why NNPC limited its investment in Dangote Refinery to 7.2 percent instead of the intended 20 percent. “Did the Nigerian government not tell us it borrowed $3.3bn from Afreximbank to take a stake in the Dangote refinery?” Ezekwesili inquired, urging President Bola Tinubu to initiate an independent audit of the Dangote Refinery-NNPC transaction to provide transparency to the public.
