As the May 29 handover nears, Nigeria’s billionaire investors are taking positions in companies seen to have the potential to benefit from the expected surge in new infrastructure and solutions expected in the power sector.
On Thursday, HH Capital Limited, a special purpose vehicle owned by Tony Elumelu, chairman of United Bank for Africa, acquired 9,697,189,984 units of shares of Transnational Corporation (Transcorp).
This brings Elumelu’s total shareholding in the company to 9,991,173,177 units, representing 25.58 percent of the company’s total shares.
“In compliance with Chapter 17, Rule 17.13 of the NGX Issuers Rules, Transnational Corporation Plc (the Company) hereby informs the Nigerian Exchange Limited (NGX) and the investing public of the below new acquisition of shares in the Company. With this new acquisition, HH Capital Limited now holds a total of 9,991,173,177 units, representing 25.58 percent of the company’s total shares,” Funmi Olofintuyi, acting company secretary of Transcorp Plc, said in a statement on Thursday.
“Share price appreciation of Transcorp (+9.7percent) was sustained, essentially driven by the 5.52 percent share acquisition of Femi Otedola,” Lagos-based analysts at United Capital said in an April 26 note to investors.
Just recently, Femi Otedola, another billionaire businessman, acquired about 5.52 percent shares of Transcorp, making him a majority shareholder of the company.
Otedola, who has a majority stake in recently listed Geregu Power Plc, had last year reduced his stake in FBN Holdings Plc after unsuccessful efforts to become the largest individual shareholder in the country’s oldest financial institution.
Otedola’s share deal in Transcorp was done between a firm owned by the billionaire and Asset Management Corporation of Nigeria. A deal of about 1.5 billion units of Transcorp shares worth about N2.1 billion was executed on the Nigerian Exchange Limited at the close of trading.
Also, 115 million units of the same shares were exchanged at N1.4 per share. The 2.245 billion shares represent 5.52 percent of the company’s issued shares. At the close of the trading session on Thursday, Transcorp closed at N3.12 per share, nearing its 52-week high of N3.24 as against its 52-week low of 0.98kobo.
HH Capital is a company owned by Tony Elumelu and the ‘HH’ appears to be an acronym for Heirs Holdings.
“The company welcomes the continued expression of confidence in its leadership and management by the investing public, as we continue our unwavering commitment to superior stakeholders’ returns, anchored in our ideology of Africapitalism,” Olofintuyi said.
In terms of the shareholding in Transcorp, Elumelu now controls 25.58 percent, followed by UBA Nominees Limited with 9.26 percent shareholdings, and Otedola, 5.52 percent stake in the company.
Analysts are predicting that Otedola’s Geregu might be one of the biggest competitors of Transcorp in the power and gas sectors. Elumelu, however, still maintained his stance in welcoming the CEO and his friend.
“Most times we go on international road shows to get investors. I’m happy to see an indigenous active investor community. I’m happy Femi is investing locally and I welcome his investment. The more people show interest in a company, the better for us shareholders,” Elumelu said at UBA’s annual general meeting on Thursday.
“When friends invest in your business, it’s a validation that they believe in your story and vision.”
Elumelu expressed his faith in the power and gas sector, describing it as a “goldmine” and expressed hopes in attracting more investors into Nigeria using it as a platform for national growth.
“You can develop Nigeria and Africa in the 21st century, with strong investments in power and access to electricity. It is the beginning of prosperity, of eradication of poverty, of illiteracy or fixing insecurity,” Elumelu said.
BusinessDay’s finding showed the company’s Transcorp stock has more than doubled its daily average of shares traded over the last three months from N1 to N3.12 as at Thursday.
These latest moves by Otedola and Elumelu have sparked interest in the Nigerian power sector, with industry analysts predicting a significant boom in the coming years.
The power sector has recently been overhauled, with the government making big efforts to boost power generation and distribution in the country.
In his manifesto, Bola Tinubu, who is now the president-elect, said this government would work to ensure generated power reaches Nigerian homes, end estimated billing, support local manufacturing of prepaid meters and ensure that the country meets its renewable energy targets outlined in the government’s energy transition plan by 2060.
According to his manifesto, his administration will push for a review and update of the Electric Power Sector Reform Act of 2005, to reform the regulatory and governance structure of the country’s power sector.
He also plans to expand Nigeria’s power base to include clean coal, solar, hydropower, and other sustainable energy technologies.
The Tinubu government also plans to ensure that government processes and procedures improve efficiency and accountability for project management, design, procurement, construction, and remittances.
Transcorp continued to deliver on its year-on-year growth strategy, with a 7 percent increase in its total assets to N442.7 billion in 2022.
The company’s power business increased its available and generated capacity from 598MW and 373MW to 720MW and 426MW, respectively, following significant investment and rehabilitation of its generating assets.
