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Otedola sells Geregu shares to raise funds, amid bid for new power plant

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FIRST BANK: Femi Otedola’s disruption bringing more losses than gains for shareholders?

Geregu Power Plc, an electricity power plant owned by Nigerian billionaire, Femi Otedola, has gone public on the Nigerian stock exchange on Wednesday.

Otedola listed Geregu Power Plant by way of introduction on the Nigerian equity market’s Main Board to access capital from a deep pool of local and international investors.

Geregu Power listed 2.5 billion shares on the Nigerian stock market at a price of N100 per share. This values the electricity power plant at N250 billion market capitalisation.

The billionaire will part with some of his shares, which he owns in Geregu Power through his investment vehicle, Calvados Holding, that holds 95% controlling stake in Amperion Power.

Amperion Power owns 99.9% of Geregu Power, which invested in the electricity privatisation in 2013 during the Goodluck Jonathan administration. The remaining 5% in Calvados Holding is held by Shangai Power.

Why is Otedola selling Geregu Power shares?

The listing comes at a period Otedola’s Amperion Power was selected by the Federal Government to bid for the acquisition of another power plant.

Read also:Femi Otedola, Buhari push Seplat, Ardova and Flour Mills into list of stocks to watch this week

Ripples Nigeria had reported in July 2022 that the government plans to sell five power plants among them; Geregu Generation Company Limited, Benin Generation Company Limited.

Others are Omotosho Generation Company Limited, Calabar Generation Company Limited, and Olorunsogo Generation Company Limited.

Otedola has been linked to the Geregu Generation. The Geregu 2 has a capacity of 434 MW. It will increase Otedola’s power plant capacity to 735 MW.

The fund-raising followed Otedola’s sale of N7.96 billion worth of shares that he owns in First Bank of Nigeria (FBN) in preparation for the power plant’s bid. It also complement’s the firm’s liquidity, having reported 45.2% growth in 2021 full year net profit.

Its profit after tax rose to N20.5 billion at the end of last year, surpassing the N14.1 billion reported during the corresponding period. Also, revenue grew 32.3% year-on-year to N70.9 billion in 2021.

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