Dangote Sugar plans N500bn rights issue to cut debt, fund expansion

Dangote Sugar Refinery Plc plans to raise as much as N500 billion ($330 million) through a rights issue as the company moves to shore up its balance sheet and finance expansion projects aimed at boosting local production.

The Lagos-based sugar producer said its board has authorised the capital raise via the issuance of ordinary shares, subject to regulatory approvals. The offer will be structured as a rights issue, allowing existing shareholders to subscribe in proportion to their current holdings.

The company said the proposed capital raise represents an “equitable and cost-effective” route to strengthening its financial position while allowing investors to maintain their ownership stakes, should they choose to fully exercise their rights.

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“The proceeds of the rights issue are intended to be applied towards deleveraging the company’s financial position, strengthening the company’s capital base, and funding identified strategic and operational initiatives, including the backward integration projects,” the company said in a filing on the Nigerian Exchange ahead of its 20th Annual General Meeting scheduled next month.

The planned capital raise follows early signs of stabilisation after two bruising years triggered by the naira’s devaluation, with losses narrowing sharply in 2025 as gross margins rebounded and foreign-exchange pressures moderated.

The sugar refiner controlled by Africa’s richest man, Aliko Dangote, posted a pre-tax loss of N72.3 billion in 2025, an improvement from N270.9 billion a year earlier. Net loss narrowed to N64.1 billion from N192.6 billion in 2024, according to its audited financial statements.

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Revenue rose to N665.6 billion in 2025 from N441.5 billion in 2024, as the company raised prices to offset higher input costs and benefited from improved volumes.

But finance costs remained elevated at N110.3 billion in 2025, though lower than N210.5 billion in 2024, reflecting reduced foreign-exchange losses and some moderation in borrowing costs.

Operationally, Dangote Sugar continues to push its Backward Integration Project, aimed at raising domestic cane output and reducing reliance on imports.

The strategy aligns with Nigeria’s sugar master plan and, if executed at scale, could shield the firm from future currency swings by lowering dollar exposure.

The company is upgrading its Numan refinery and developing greenfield sites in Nasarawa and Taraba, aiming to produce 1.5 million metric tonnes of locally grown sugar annually in the long term.

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Management says the expansion will also generate ethanol and animal feed from by-products, potentially diversifying revenue streams.

On the balance sheet, total assets climbed to N1.04 trillion in 2025 from N949.6 billion in 2024, driven largely by higher property, plant, and equipment as the company continued its backward integration projects.

Total liabilities declined to N861.3 billion from N884.3 billion, suggesting some deleveraging after the worst of the currency turmoil.

Total equity improved to N183.5 billion from N65.3 billion a year earlier, helped by the reduced loss.

Borrowings remained substantial at N684.4 billion in 2025 compared with N717.6 billion in 2024, underlining continued exposure to funding costs.

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Shares of Dangote Sugar have lost 11 percent of their value in the past four weeks, closing the last trading day on Monday, March 23, 2026, at N73 per share on the Nigerian Stock Exchange (NGX), recording a 0.1 percent gain over its previous closing price of N72.95.

Dangote Sugar Refinery began the year with a share price of N60.00 and has since gained 21.7 percent on that price valuation, ranking it 65th on the NGX in terms of year-to-date performance.

If the planned rights issue is fully subscribed, the offering would provide the company with fresh capital to stabilise operations, fund expansion, and position itself for long-term growth in Africa’s most populous nation, where rising demand for food staples continues to support structural consumption trends despite near-term economic headwinds.