The Ethiopian Capital Market Authority has clarified that a proposed offering of securities by Dangote Petroleum and Petrochemicals in Ethiopia will be restricted to qualified investors only.
In a public notice, the Authority said it has been approached in connection with the proposed offering of the company's securities as part of an Initial Public Offering. The notice states that any offering, marketing, solicitation, or sale of the securities in Ethiopia must be conducted exclusively to qualified investors as defined under Ethiopian capital market laws and directives.
The proposed offering does not constitute an offer to the general public in Ethiopia. The securities cannot be advertised, marketed, offered, distributed, or sold to any person who does not qualify as a qualified investor under the applicable regulatory framework.
Conditions for market participants
The Authority outlined several requirements for any person involved in the distribution, marketing, or placement of the securities in Ethiopia. Capital market service providers, intermediaries, representatives, and agents must ensure that the offer is directed solely to persons who satisfy the requirements for classification as qualified investors.
Investors in an offer or sale to qualified investors are limited to not more than 100 qualified investors, unless prior approval is obtained from the Authority. The qualified investor status of each prospective investor must be verified and documented before the investor is permitted to participate in the offer.
Offering documents, promotional materials, and other communications must clearly state that the offering in Ethiopia is restricted to qualified investors and is not available to the general public. Any advertisement for solicitation must be approved by the Authority prior to publication.
Regulatory caution
The Authority advised that authorization for an offering to qualified investors should not be interpreted as approval or endorsement by the Authority of the securities, the issuer, the IPO, its investment merits, or any representation concerning the future value or performance of the securities.
Qualified investors are responsible for reviewing the relevant offering documents, assessing the risks associated with the investment, and making their own informed investment decisions.
The Authority warned that any offering, solicitation, advertisement, or sale of the securities in Ethiopia outside the permitted qualified investor framework may constitute a violation of applicable law and may result in regulatory action.
The notice comes as Ethiopia continues to develop its capital markets regulatory framework under the Capital Market Proclamation No. 1248/2021. The Public Offer and Trading of Securities Directive No. 1030/2024 sets out the rules governing public offers and trading of securities in the country.
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