Otedola sells ownership in Geregu Power, to invest billions in financial sector

The deal was valued at $750 million, a source close to Mr Otedola, with knowledge of the transaction told PREMIUM TIMES.

The chairman of financial services group First HoldCo Plc, Femi Otedola, has offloaded his interest in Geregu Power Plc, the electricity generation company he took public in October 2022 at a market value of N250 billion, now in the neighbourhood of N2.9 trillion.

The deal was valued at $750 million, a source with knowledge of the transaction told PREMIUM TIMES. Until the completion of the share sale, he was the majority owner of the Lagos-quoted firm.

His stake in the utility at the point of listing was 95.5 per cent, variously held through Calvados Global Services and Amperion Power Distribution Company.

All the same, partly selling down the shares largely to strategic investors such as Afreximbank’s Fund for Export Development in Africa and the State Grid Corporation of China in the past few years scaled back his shareholding, which stood at 76.4 per cent as of September, according to Geregu Power’s latest financial report.

Between September and now, the billionaire tycoon, whose interest also encompasses banking, shipping and real estate, further offloaded 14.5 million shares through Amperion, according to stock exchange filings.

That puts his latest divestment at 1.9 billion units or 75.8 per cent of the company’s total issued shares.

Insiders said a consortium of lenders, led by Zenith Bank, facilitated the buyout, which had BlackBirch Capital as the financial adviser.

Geregu Power’s net profit for the first nine months of the year marginally jumped by 3.8 per cent to N25.1 billion, although revenue rose at a fairly faster pace, following a sharp surge in cost of sales.

Total assets, estimated at N273.1 billion, grew by about 60 per cent within the first three years of its listing.

According to sources, Mr Otedola is looking to invest more of his fortune in the financial sector, where he is currently the top shareholder of First HoldCo, the banking group in which he owns 16.9 per cent of the issued shares.

Mr Otedola and Geregu Power Plc

Ajaokuta-based Geregu Power was incorporated in November 2006, overseen then by the defunct Power Holding Company of Nigeria (PHCN) on behalf of the Nigerian Government.

The plant was built by the government and inaugurated in February 2007. It was one of the five thermal generation companies that emerged from spinning off PHCN when the government completed the privatisation of the power industry.

In November 2013, Amperion purchased a 51 per cent controlling stake in Geregu Power for N20.5 billion.

Mr Otedola sold his 75 per cent ownership in Forte Oil (formerly African Petroleum and now Ardova) for about N64.9 billion to Prudent Energy, owned by energy investor Abdulwasiu Sowami, in 2019.

The proceeds of the deal helped finance an acquisition of additional stake in Geregu Power that same year.

According to information on the company’s website, Geregu Power contributes on average 10 per cent of the power Nigeria generates, with installed capacity currently standing at 435MW.