The National Pension Commission (PENCOM) has approved the participation of Pension Fund Administrators in the highly anticipated Initial Public Offering of Dangote Petroleum & Petrochemicals FZE.
PENCOM, in a circular to all licensed Pension Fund Operators, said the regulatory step was taken after it carefully evaluated the strategic investment opportunity and the economic impact of the proposed Initial Public Offering (IPO) of Dangote Petroleum Refinery & Petrochemicals FZE (DPRP) on the pension industry and the wider economy.
The statement signed by A.M. Saleem, Director, Surveillance Department, PENCOM, further stated, “In reaching its decision, the Commission considered DPRP’s strategic importance, strong fundamentals, and wide-ranging economic benefits, and the growth potential.
”The Commission also took into consideration the record of Dangote Industries Limited, DPRP’s majority shareholder. Accordingly, the Commission hereby grants a special dispensation from Section 6.2.7.1 (iii) of the Revised Regulation on Investment of Pension Fund Assets.
”This dispensation involves waiving the applicable existence, profitability, and dividend requirements without prejudice to other extant regulatory safeguards.”
The Pension industry regulator tasked all PFAs to ensure that all investments made under this dispensation are undertaken in line with their internal investment policies, risk management frameworks, and fiduciary duties to contributors and retirees.
According to PENCOM, “The regulatory forbearance granted under this Circular is exceptional, one-off, and strictly case-specific to the Initial Public Offering of Dangote Petroleum Refinery & Petrochemicals FZE. It shall not constitute an automatic precedent for future Initial Public Offerings or other investment transactions.”