Capital markets regulator, Capital Markets Authority (CMA) has cleared the sale of shares in Dangote Petroleum Refinery and Petrochemicals FZE to selected Ugandan investors, but barred the company from making a public appeal for investors.
The agency said on October 6 that it had approved the offer of securities under the refinery’s Initial Public Offering (IPO) in Uganda.
The approval followed an application by Stanbic IBTC Capital Limited, which is acting for the issuer. The IPO and its prospectus have already been approved by Nigeria’s Securities and Exchange Commission.
However, the Ugandan approval comes with strict conditions. CMA said the IPO can only be marketed and distributed through intermediaries licensed by the Authority and that have obtained written clearance to handle the transaction.
Participation has also been limited to high-net-worth individuals and professional investors. This means the refinery cannot use mass advertising or other forms of public solicitation to attract Ugandan investors.
As of October 6, SBGS Uganda Limited was the only intermediary authorised by CMA to market and offer the IPO in Uganda. The regulator said it would announce any additional intermediaries that are subsequently cleared.
CMA said it had also exempted the issuer from some requirements under Part XII of the Capital Markets Authority Act, subject to the conditions attached to the approval.
The regulator, however, warned investors not to interpret the approval as an endorsement of the IPO. It said the decision does not amount to a recommendation or confirmation of the refinery’s financial position, investment prospects or expected returns. CMA also said it had not assessed or endorsed the IPO prospectus.
Investors have been cautioned about the risks that come with buying securities listed outside Uganda, including currency fluctuations, changes in market prices, custody arrangements, taxation and difficulties that may arise when exercising investor rights in another jurisdiction.
CMA also pointed out that Dangote Petroleum Refinery and some of the companies involved in the cross-border custody and execution of the transaction are not licensed or directly supervised by the Ugandan regulator.
The approval is therefore limited to the distribution of this particular IPO in Uganda and does not give the issuer a general clearance for future transactions.
CMA urged investors considering the offer to assess the risks carefully and seek independent professional advice before investing.
