LAGOS (Reuters) – Dangote Industries Limited has completed more than half of a planned 300 billion naira ($720.82 million) bond issue to fund its mega-refinery on the outskirts of Lagos, spokesman Anthony Chiejina told Reuters on Thursday.
Chiejina said the company had raised 187.5 billion naira in the series one issuance, completed last month, and would announce a date for a second series as soon as possible.
Proceeds will go toward the $1.1 billion that the company needed as of January for the project, which many view as the solution to years of sclerotic fuel supply in Africa’s most populous nation.
Nigeria’s Central Bank last month raised rates for the second time to tackle inflation, but low bond yields have spurred corporates in Nigeria to raise debt.
This transaction comprised of a 7-year Tranche-A bond issued at 12.75% and a 10-year Tranche-B bond issued at 13.50%, the company said in a statement.
The planned 650,000 barrel per day (bpd) oil refinery will transform Nigeria into a fuel exporter. Despite being Africa’s largest crude oil exporter, Nigeria must buy nearly all of its fuel from abroad, straining government finances and sapping availability of foreign exchange.
The refinery cost grew to $19 billion after initial estimates of $12-$14 billion and years of delays. State oil company NNPC, which last year acquired a 20% stake in the refinery for $2.76 billion, said that it expects the refinery to start in the first quarter of 2023.
Fitch said in May that completion of the refinery project by 2023 was a key driver of their AA rating for the company.
($1 = 416.1900 naira)
(Reporting By Libby George and Chijioke Ohuocha; Editing by Kirsten Donovan)
