The National Pension Commission (PenCom) has granted Pension Fund Administrators (PFAs) a ‘one-off’ special approval to invest pension fund assets in the proposed Initial Public Offering (IPO) of Dangote Petroleum Refinery & Petrochemicals FZE.
The approval was disclosed in a circular signed by the Director of the Surveillance Department at the Commission, A. M. Saleem. PenCom said the approval takes immediate effect.
According to the commission, the decision followed a careful evaluation of the strategic investment opportunity and the economic impact of the proposed IPO on both the pension industry and the wider Nigerian economy.
“The Commission has 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.
“In light of these considerations, the Commission has reviewed the request for a special dispensation that would permit Pension Fund Administrators (PFAs) to invest pension fund assets in the IPO,” the circular stated.
PenCom said it considered the refinery’s strategic importance, strong business fundamentals, economic benefits, and growth potential before approving the request.
It also noted that the track record of Dangote Industries Limited, the majority shareholder in DPRP, influenced the decision.
“In reaching its decision, the Commission considered DPRP’s strategic importance, strong fundamentals, wide-ranging economic benefits, and growth potential. The Commission also took into account the record of Dangote Industries Limited, DPRP’s majority shareholder,” PenCom stated.
According to the circular, the commission granted a special dispensation from Section 6.2.7.1 (iii) of the Revised Regulation on Investment of Pension Fund Assets.
The approval waives the existing requirements relating to the company’s years of existence, profitability, and dividend payment history, while maintaining other regulatory safeguards.
“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,” it stated.
PenCom, however, directed PFAs to ensure that any investment made under the dispensation aligns with their internal investment policies, risk management frameworks, and fiduciary responsibilities to contributors and retirees.
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The commission further clarified that the regulatory forbearance is exceptional, one-off, and strictly limited to the IPO of Dangote Petroleum Refinery & Petrochemicals FZE.
“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,” PenCom said.
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