• Friday, June 21, 2024
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Otedola’s Geregu Power listing adds N250bn to stock market

SEC’s largest approved corporate bond by Power Generation Company debuts in debt capital markets

Geregu Power Plc, chaired by billionaire businessman Femi Otedola, was listed by introduction on the main board of the Nigerian Exchange Limited (NGX), becoming the first power firm to go public almost nine years after the nation’s power sector was privatised.

A total of 2.5 billion ordinary shares of Geregu Power were listed at N100 per share, under the utilities sector and electric power generation sub-sector of the NGX, with the trading symbol GEREGU.

Geregu Power is the first power generation company in Nigeria to be listed on the NGX Main Board, a listing segment for well-established companies with demonstrable records of accomplishments.

The listing of Geregu Power’s shares added N250 billion to the market capitalisation of NGX, further boosting liquidity in the Nigerian capital market and providing opportunities for wealth creation.

Amid high investors’ demand, the stock gained 10 percent on its first trading day on the NGX to close at N110 per share from an opening price of N100 per share. The gain pushed its market capitalisation to N275 billion from the N250 billion it was listed.

The firm traded 8.5 million volumes of shares at N935 million in one day as its listing further boosted liquidity in the Nigerian capital.

Geregu Power is primarily involved in the generation and sale of electric power, transmitted through the national grid to the Nigerian Bulk Electricity Trading Plc for onward delivery to power distribution companies.

Read also: Otedola’s Geregu gains 10% on first trading day
The firm generates electric power through its three-unit 435-megawatts gas-fired turbines, and sends it to the national grid through the Transmission Company of Nigeria. It also generates revenue from capacity charges, on the basis of energy tariffs determined by the Nigerian Electricity Regulatory Commission’s Multi-Year Tariff Order.

Geregu Power reported an increase in revenue to the tune of N70.9 billion in 2021, which represents a 32.3 percent year-on-year increase. The company’s profit after tax stood at N20.5 billion in 2021, representing an increase of 45.2 percent when compared to the N14.1 billion it made in 2020.

To mark the significance of the listing, a closing gong ceremony has been slated to hold in the last week of this month.

The firm had appointed PricewaterhouseCoopers in June 2022 as auditors of the firm; and also brought on board Paul Gbededo, former group managing director/chief executive of Flour Mills of Nigeria, onto its board.

Speaking on the listing, Otedola, chairman, board of directors of the company, said: “The listing of the company was the actualisation of a vision to bring world-class standards in governance, sustainability, and business processes to the company and the Nigerian electricity sector.

“Listing on the Main Board of the Exchange will ensure that the long-term growth of the company is assured and its benefits will be passed on to our esteemed shareholders.”

The NGX has continued to evolve in order to remain an attractive destination for issuers, meet the needs of its stakeholders and achieve the highest level of competitiveness.

Commenting on the development, Abubakar Mahmood, chairman of NGX, said: “We are particularly pleased that Geregu Power has joined the prestigious group of companies listed on our Main Board, which will differentiate it as a professionally run power company with high standards, having met NGX’s listing criteria.

“A Main Board listing is a sign of commitment to strong corporate governance, excellence, professionalism, efficiency in service delivery, and providing increased returns to shareholders. It is our expectation that the Geregu Power listing will encourage other power generation and distribution companies to list their shares on the Exchange, thereby opening the sector up to cheaper, long-term capital that will boost infrastructural development and value creation.”

On his part, Temi Popoola, chief executive officer of NGX, described the listing as a promising development in the country’s power sector.

He said: “Having Geregu listed in our market is proof of NGX’s commitment to building a robust and inclusive market and creating avenues for sustainable investment.

“This listing will enhance liquidity for Geregu, increase its visibility among global investors, elevate its value and boost transparency, as our marketplace is a sterling platform for raising capital and enabling sustainable growth for national development. As a listing platform of choice, we are committed to working with companies at various stages of growth to explore the different opportunities in the capital market to meet their business objectives.”

Otedola joined the board of Geregu Power as chairman of the board of directors in November 2013. Prior to this, he was the chairman of the board of directors of Forte Oil Plc (now Ardova Plc) from May 2007 to June 2019. His vision transformed Forte Oil into one of the highest performing companies on NGX, according to a statement.

It said the company grew in leaps and bounds to become a model of the possibilities inherent in Nigeria, winning numerous accolades in recognition of the successful business turnaround, prompt financial reporting, strong corporate governance and investment of choice within the oil and gas industry and NGX.

The statement said: “In 2019, with a firm belief in the power reforms of the federal government and overall vision ‘to be the leading provider of integrated power in the region’, he made a very strategic decision to sell his majority stake in Forte Oil Plc and invest in developing the power industry in Nigeria through the acquisition of a majority stake in GPP, via an investment vehicle called Amperion Power Distribution Company Limited.

“He has held several board memberships including president of the Nigerian Chamber of Shipping and as past chairman of Transcorp Hilton Hotel, Abuja.”