Investors across Kenya and East Africa can now own a piece of the Dangote mega oil refinery company at KES53.50 as Africa's richest man seeks to raise KES39 billion to expand operations while also deepening the continent’s financial markets.

Individuals with valid CDS accounts and local mobile numbers can now file aapplications for the Kenya Global Depository Receipts (GDRs) by dialing up USSD code *483*250# or by applying through the company's online portal, a memorandum on the investment states.

In disclosures shared on Wednesday, the Dangote Petroleum and Petrochemicals FreeZone Enterprise is seeking applicants for a total of 728,971,962 Kenya Global Depository Receipts (GDR) that are on offer in Nairobi, Kampala and Dar es Salaam financial markets.

According to the markets statement, Dangote Refinery states that each GDR is set to represent an ordinary share in the Nigeria-headquartered multinational. One GDR will carry a nominal value of USD0.000013 (about KES0.00169).

Dangote's GDR programme, which has received the greenlight from the Capital Markets Authority, is an unsponsored inward initiative that gives investors a chance to participate in the Dangote Petroleum Refinery IPO.

The GDRs, whose applications opened on Tuesday and are set to close on 13th October, are poised to trade on the Nairobi Securities Exchange subject to securing the applicable regulatory nod.

Investors seeking to own a stake in the refinery business are set to make a minimum subscription of 2000 GDRs, which translates to at least KES107,000, paid in full upon application. Thereafter, the prospectus shows investors will be required to make applications in multiples of 100.

Renaissance Capital (Kenya) Limited acts as GDR issuer and lead transaction adviser, with Renaissance Capital Africa as joint lead adviser. Stanbic Bank Kenya serves as custodian and receiving bank while Image Registrars is the data processing agent and share registrar.

The Information Memorandum states that the GDRs will only be allotted and issued if the minimum success threshold is met and if the Securities and Exchange Commission of Nigeria grants an approval or no-objection permitting listing on the NSE. 

Should the Nigerian clearance not be obtained, the GDRs will not be issued or listed. Investors would then continue to hold the underlying shares through an omnibus account maintained by the GDR issuer, with liquidity provided by sales on the Nigerian Exchange.

Already, the refinery has placed an application seeking the listing of the GDRs on the Main Investment Market Segment of the Nairobi bourse.

Cash dividends paid by the underlying issuer in naira or US dollars will be converted by the depository into Kenya shillings and distributed to GDR holders net of fees and applicable withholding taxes. 

At the moment, there is no double-taxation agreement between Kenya and Nigeria, a point noted in the risk disclosures. Holders of the GDRs will not be eligible for the retail investor incentive programme available under the Nigerian IPO, as the securities will be held under a nominee account.

Additionally, the voting rights attaching to the underlying shares will be exercised collectively by simple majority or special resolution where required, rather than by individual GDR holders. 

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