Dangote Cement plans London GDR issue

Dangote Cement plans London GDR issue
Published: 24 November 2010

Nigeria’s biggest cement maker Dangote Cement will issue global depository receipts (GDR) to be listed on the London Stock Exchange next year, its chairman Aliko Dangote told Reuters on Tuesday.

"We have actually made up our mind to do a GDR here in London. The structure is much better for us, it’s a market we understand very well," Dangote said in an interview.

"We have to do it in stages, where we do a GDR first, then we will list going forward on the main market. We have an internal target to list in the next year. I think we will achieve it," he said.

He said Morgan Stanley was one of three international investment banks that would advise on the issue.  
"The two others are not announced yet ... They will be building books for the GDR," he said.

Dangote Cement has said it plans to sell a 20 per cent stake through a global share offering in order to comply with a minimum 25 per cent free float requirement in Nigeria, where it listed a month ago.

The Nigeria listing, which followed a merger with local rival Benue Cement, valued the firm at US$14bn and made it the largest company by market capitalisation in sub-Saharan Africa’s second-biggest economy.

Billionaire tycoon Aliko Dangote was the majority owner of both Dangote and Benue Cement, meaning the combined free float in Nigeria after the deal was less than five per cent, well below the minimum requirement.

Nigerian regulators gave the company 24 months to sell down an additional 20 per cent – worth US$2.8bn at the Nigerian listing price of NGN135 (US$0.90) –  to comply with local listing requirements.

Dangote Cement already accounts for around a third of the capitalisation of the Nigerian stock market, which would struggle to absorb any further share offering of that size.