Dangote Refinery to Sell NNPC’s Unacquired 12.7% Stake
Dangote Refinery, the world’s biggest single-train refinery, is planning to sell a 12.75% stake in the company to service its loans.
The plan, according to Fitch Ratings, a credit rating agency, follows the Nigerian National Petroleum Company Limited’s (NNPC) unfulfilled option to acquire additional shares.
The NNPC had previously acquired a 7.25% stake in the refinery for $1.0 billion in 2021, with the option to purchase an additional 12.75% stake by June 2024. However, the national oil firm declined to further invest, leaving the Dangote Group to explore alternative means of servicing its significant syndicated loan maturing in August 2024.
According to Fitch Ratings, the Dangote Group’s decision to divest a 12.75% stake in the refinery is aimed at meeting its loan obligations.
“Since the option has not been exercised, the group plans to divest a 12.75% stake in DORC in 2024. 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,” Fitch said.
Dangote Refinery Faces Monopoly Allegations
Aliko Dangote, the owner of the 650,000 barrels per day capacity refinery, has recently voiced some challenges his business has encountered, particularly with NNPC, claiming that the state oil company has accused him of monopoly.
“Let them (NNPCL) buy me out and run the refinery the best way they can. They have labeled me a monopolist. That’s an incorrect and unfair allegation, but it’s OK. If they buy me out, at least, their so-called monopolist would be out of the way,” Dangote said in late July.
His supposed feud with NNPC was reportedly intervened by President Bola Tinubu, who on July 29 directed that crude oil to local refineries, including Dangote Petroleum Refinery, should be sold in naira.
Read: Tinubu Mandates Crude Oil Sales in Naira to Dangote; Experts Weigh In on Implications
