Aliko Dangote
Dangote has spent $327m for 25% Stake in Kenya Pipeline Company.
Africa’s richest man, Aliko Dangote, has acquired a 25 per cent stake in Kenya Pipeline Company (KPC) for about $327 million, extending his reach into East Africa’s fuel distribution network.
Dangote, founder and chief executive of Dangote Industries Limited, disclosed the deal at an event in London on Wednesday, according to Bloomberg. He did not say which of his companies made the purchase.
“We bought 25% of their pipeline network for the distribution of petroleum products,” he said.
A report from the Nairobi Securities Exchange (NSE) on Monday showed a block transaction in KPC of about 4.5 billion shares, valued at KSh42.5 billion ($327.4 million). The company’s market valuation is about KSh163.9 billion.
KPC moves petroleum products from the port of Mombasa to inland markets. Its pipeline network runs about 1,342 kilometres and can handle an estimated 14 billion litres of products a year. It also supplies other East African countries.
The company was set up in 1973 and began commercial operations in February 1978. The Kenyan government owned it fully until it sold 65 per cent of the shares in an initial public offering (IPO) earlier this year. KPC is now listed on the NSE.
The purchase follows Dangote’s $16 billion refinery project in Kenya’s Lamu archipelago, which is modelled on his 700,000-barrel-per-day refinery in Lagos. Construction formally began on September 30, with completion targeted around 2030. The project is expected to cost between $16 billion and $17 billion.
At the groundbreaking, President William Ruto said the Kenyan government plans to take an equity stake in the refinery through the National Infrastructure Fund.
Dangote is also courting East African investors for his Nigerian refinery. Dangote Petroleum Refinery & Petrochemicals FZE has offered them nearly 20 per cent of its $1.6 billion IPO. The regional allocation is expected to raise up to $300.4 million. It covers about 729 million Global Depositary Receipts at KSh53.50 each, following approvals in Kenya and Uganda.
