Geregu Power Plc and Africa Export and Import Bank (Afreximbank) have started discussions on possible acquisition of the shares of the electricity power generating company (Genco), in what promises to be the first major acquisition after the Genco was listed by introduction in October 2022.
Geregu Power is valued at N307 billion at today’s opening price at the Nigerian Exchange (NGX). Geregu Power’s share price had dropped by 5.68 per cent from N130.20 per share to N122.80 per share in weekend trading at NGX.
The Femi Otedola-led board of directors of Geregu Power at the weekend indicated that Afreximbank, through its impact development arm, Fund for Export Development in Africa (FEDA), has shown interest in acquiring equity stakes in the Genco.
“The discussions are currently on going and where these talks progress to a more advanced stage, the company will notify the Exchange and the investing public in line with the rules of the Exchange,” Geregu stated in a regulatory filing at the Nigerian Exchange.
Established in February 2019, FEDA is tasked with implementing Afreximbank’s equity investment programme by providing seed capital to export-focused companies within a wide range of sectors. FEDA aims at also facilitating foreign direct investment flows into Africa’s trade and export sectors and to fill the equity funding gap estimated at some $110 billion annually.
FEDA already has about $670 million fund with the ambition to raise a total of $1.3 billion over the coming months.
The Geregu Power’s acquisition deal is in line with FEDA’s recent portfolio development. Last month, FEDA announced a $85 million investment into ARISE Integrated Industrial Platforms (ARISE IIP), a pan-African infrastructure developer and operator. The transaction will support ARISE IIP’s ambition to provide tailor-made industrial ecosystems across Africa and improve the competitiveness of the manufacturing industry.
FEDA had also in February 2022 announced its investment in Ecow-Gas B.V. (Ecowgas), a Liquefied Natural Gas (LNG) distribution infrastructure platform in the West Africa region.
FEDA had noted that its investment in Ecow-Gas would support the creation, in partnership with a leading international oil company, of the infrastructure to provide access to cheaper and cleaner fuels for underserved industrial customers across the region using LNG. The Ecowgas deal was also expected to promote efforts to minimize CO2 emission by replacing environment-polluting fuels currently in use.
Geregu Power had in October 2022 listed its entire paid up share capital on the main board of the Nigerian Exchang (NGX), paving the way for trading on the shares of the Genco.
NGX listed a total of 2.5 billion ordinary shares of Geregu at N100 per share, under the utilities sector and electric power generation sub-sector of NGX
Geregu Power, which generates some 10 per cent of Nigeria’s power blazed the trail as the first GenCo to be listed on the NGX’s main board, a listing segment for well-established companies with demonstrable records of accomplishments.
The listing of Geregu’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.
Chairman, Geregu Power Plc, Mr. Femi Otedola said that 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.
He added that 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 shareholders.