By Ethiopia’s capital markets regulator said on Tuesday that any Dangote IPO in Ethiopia must be offered only to qualified investors, barring sales to the general public, according to a public notice.
The Ethiopian Capital Market Authority (ECMA) said it had been approached about a proposed offering of securities of Dangote Petroleum and Petrochemicals in connection with its initial public offering (IPO).
“The proposed offering does not constitute an offer to the general public in Ethiopia,” the notice said.
Offer restricted to qualified investors
The authority said any offering, marketing, solicitation or sale of the securities in Ethiopia must be conducted exclusively with qualified investors, as defined under Ethiopian capital market law.
It cited the Capital Market Proclamation No. 1248/2021 and the Public Offer and Trading of Securities Directive 1030/2024.
The securities may not be advertised, marketed, offered, distributed or sold to anyone in Ethiopia who does not qualify as a qualified investor, the notice said.
Conditions for intermediaries
ECMA said anyone taking part in the distribution, marketing or placement of the securities must meet several conditions. This includes capital market service providers, intermediaries, representatives and agents.
The conditions are:
The offer must be directed solely to people who meet the requirements to be classed as qualified investors.
Participation must be limited to no more than 100 qualified investors, unless the authority gives prior approval.
Each investor’s qualified status must be verified and documented before they can take part.
Offering documents, promotional materials and other communications must state that the offer is restricted to qualified investors and not open to the public.
Any advertisement for solicitation must be approved by the authority before publication, under Article 53 of Directive 1030/2024.
No general solicitation, mass marketing or public advertising may be undertaken in a way that could reasonably make the offer available to others.
All other applicable requirements of the proclamation, ECMA directives and ECMA-imposed conditions must be met.
No endorsement
The authority said that allowing an offering to qualified investors should not be read as approval or endorsement of the securities, the issuer, the IPO or its investment merits.
It also said this was not a representation about the future value or performance of the securities.
Qualified investors are responsible for reviewing the offering documents, assessing the risks and making their own investment decisions, the notice said.
Warning on violations
ECMA said any offering, solicitation, advertisement or sale outside the permitted framework may violate the law and could lead to regulatory action.
This includes offers to the general public without the registration, approval or exemption required under Ethiopian capital market law.
The authority advised investors and market participants to exercise appropriate diligence. It said they should deal only through persons duly authorised to carry out capital market activities in Ethiopia.
The notice gave the authority’s Communications and Public Relations Directorate as the contact for enquiries.
ECMA oversees Ethiopia’s capital market, which the country has been building in recent years. The 2021 proclamation cited in the notice is the main legal basis for that regime.
Dangote Petroleum and Petrochemicals is part of the Dangote group, led by Nigerian businessman Aliko Dangote.
