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The Central Bank of Nigeria (CBN) which launched a Retail Dutch Auction recently has been making waves among investors, one of the richest business groups in Nigeria, Dangote Group’s subsidiaries have taken the lead as major recipients in the Retail Dutch Auction.
Dangote Group Acquires $105.33 Million in the Latest CBN Retail Dutch Auction
The group subsidiaries made a purchase of at least $105.33 million in successful foreign exchange (FX) bids. The allocation takes up about 13% of the whole $876.26 million CBN distributed among those banks that are qualified.
Among the qualified primary banks for the allocation were Union Bank, Access Bank, Zenith Bank, Sterling Bank, and Providus Bank, these banks secured the most FX for Dangote’s group in the CBN Retail Dutch Auction.
Four banks of the above made it to the list of the top 10 banks that got the most FX from the Central Bank of Nigeria’s (CBN) auction.
These banks took a crucial part in the importation of essential raw materials, spare parts, and other equipment to make the process of operation of Dangote’s group industrial company efficient.
Dangote Sugar Refinery most beneficial of the FX
The richest man in Africa, Aliko Dangote was also part of the firms that made the biggest FX bids, he made a bid of $87.42 million through his company Dangote Sugar Refinery. Dangote Sugar Refiner got the largest allocation for the importation of Brazilian cane raw sugar.
As an example, one of the transactions includes the import of 16,000 metric tons of raw sugar, with just one bid at a rate of up to $10.96 million.
Dangote Cement PLC, a big name in Africa’s cement industry, also bid an amount of $9.03 million successfully in the auction. Other smaller allocations were also given to the PLC to be used for buying new spare parts for the cement plant machinery, especially by Dangote Cement PLC.
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The Dangote Oil & Gas Company Limited was given $5.33 million by the CBN’s Auction event. The Oil & Gas Company received a huge FX for purchasing low-pour fuel oil (LPFO) and gasoil, which are important to the company’s growth for energy production and industrial operations. A single bid in the firm which was confirmed as the largest one is estimated at $2.5 million used for the purchase of 15,000 metric tons of gasoil.
Being part of the organization, Dangote Industries Limited was allocated the sum of $2.5 million, also Dangote Agro Sacks Limited was allocated $941,600.96. The allocation of $2.5 million received by Dangote Industries Limited will used toward the importation of a set of gas turbines.
Some other allocations were granted to Dangote Sinotruk West Africa Limited and Dangote Coal Mines Limited, with amounts aggregating to $7,161.50 and $104,568.68.
Generally, most of the foreign exchange (FX) allocated to Dangote’s firms was used in the importation of spare parts for several manufacturing and industrial activities. Let’s take as an example, that Dangote Agro Sacks Limited’s allocated FX was used to import spare parts needed for the textile machinery and manufacturing equipment to ease its production process.
What we know about events that happened recently
The Dangote Group lost around N1.21 trillion of their market capitalization in July 2024, this is as a result of a double-digit decline in share price in July.
The company’s president, Aliko Dangote was also impacted through his net worth, he owns an 86% stake in Dangote Cement Plc, a 72.2% share in Dangote Sugar Refinery, and a 62.19% in NASCON. His personal losses were adjusted to be around N1.02 trillion ($680 million).
We also got to know that the Federal Executive Council approved President Bola Tinubu’s proposal of selling crude oil to Dango Refinery and developing refineries in Naira. The proposal which is in the faith of strengthening the Naira and helping stabilize fuel pump prices.
