Wednesday, August 28, 2013

Dangote to borrow N475bn to finance new refinery project

The Dangote Group said on Tuesday that it plans to borrow about $3.3
billion (about N475 billion) to finance the construction of a $9
billion oil refinery and petrochemical complex in Nigeria.
The group, whose business interests range from cement manufacturing to
basic food processing and oil and gas, also said it was seeking a
further$2.25 billion from development funds for the project, into
which it would inject a further $3.5 billion of its own equity.
Reuters gathered that the loan would be signed with financiers on
September 4 as part of efforts to push for the realization of the
refinery project, which the Chairman of the group, Aliko Dangote, said
would take off since April.
The Dangote Group accounts for up to 30 per cent of Nigeria's stock
market capacity. The refinery would have a capacity of around 400,000
barrels per day by late 2016, almost doubling Nigeria's current
refining capacity.
"We are not resting on our oars," Group spokesman, Anthony Chiejina
was quoted by Reuters as saying, adding that the complex, including
petrochemical and fertilizer plants, "could be the single largest
contribution to this government's economic transformation agenda".
Nigeria now has combined capacity to produce some 445,000 barrels
perday from four refineries located in Warri, Port Harcourt and
Kaduna, though they are currently operating below installed capacity
due to decades of mismanagement and corruption.
A major factor that has limited the interest in private refineries is
the subsidization of petrol by the federal government, although
analysts believe Dangote's decision to venture into refining means the
company, based on its other business successes, is prepared for a
profitable venture.

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