Dangote Sugar plans N500 billion rights issue for growth strategy

Dangote Sugar Refinery Plc has announced plans to raise up to $500 billion through a rights issue, pending regulatory approval, in a major capital mobilization effort to strengthen its balance sheet and fund long-term expansion.

The proposal was made known in a statement signed by the Company Secretary, Mrs Temitope Hassan, following the 20th Annual General Meeting of the Company held in Lagos. The shareholders would have approved the capital increase plan, authorizing the Board to proceed with the issue of new ordinary shares according to defined terms.

According to the company, the rights issue will allow existing shareholders to purchase additional shares commensurate with their holdings.

The Board also has the power to determine pricing, timing and structure, subject to approval from the relevant regulatory authorities.

The company added that the offer may be subscribed depending on market conditions, while any unsubscribed shares may be assigned to other investors or canceled in line with regulatory provisions.

Management said the initiative aims to strengthen financial stability and support expansion in key operating segments. The move is also expected to boost production capacity and improve efficiency within Nigeria’s competitive sugar sector.

The planned capital raise comes as Dangote Sugar continues to show mixed but improving financial performance.

In its 2025 audited results, revenue increased by 24.56% to 829.2 billion naira, largely driven by strong demand for 50kg of sugar, which accounted for over 807 billion naira of total earnings. Further contributions came from retail sales of sugar, molasses and freight services.

However, rising production costs – particularly raw material expenses – pushed the cost of sales to N706.5 billion. Despite this, the company recorded a gross profit of 122.6 billion naira and significantly reduced its pre-tax loss to 72.2 billion naira, compared to 270.8 billion naira a year earlier.