What's Happening?
Nigerian billionaire Femi Otedola has sold his controlling stake in Geregu Power Plc, a major electricity producer in Nigeria, for $750 million. This transaction marks one of the largest private power-sector
divestments in Nigeria's history. Otedola's exit from Geregu Power concludes a 12-year investment cycle, significantly enhancing his status among Africa's top billionaires. The deal involved MA'AM Energy Limited acquiring a 95% equity stake in Amperion Power Distribution Company Limited, which held 77% of Geregu Power. The acquisition was financed by a consortium of Nigerian banks led by Zenith Bank, with BlackBirch Capital as the financial adviser. The sale did not involve a direct transfer of shares on the Nigerian Exchange, leaving Geregu's listed shareholding unchanged.
Why It's Important?
This sale underscores the scale of value creation in Nigeria's privatized power sector and highlights the potential for significant returns on investment in the region. Otedola's exit from Geregu Power not only boosts his personal wealth but also reflects the growing interest and investment in Nigeria's energy sector. The transaction is a testament to the profitability and strategic importance of Geregu Power, which contributes approximately 10% to Nigeria's national grid. The deal also signifies a shift in leadership and potential new directions for Geregu Power under MA'AM Energy's control. For Otedola, the sale aligns with his broader strategy to focus on financial services, as evidenced by his role as chairman and largest shareholder of First HoldCo Plc.
What's Next?
Following the transaction, Geregu Power has announced a reconstitution of its board, with a new chairman and several new directors, indicating a complete leadership transition. The company remains financially robust, reporting significant revenue and profit growth. As Geregu Power continues to operate under new leadership, it may explore further expansion and investment opportunities in Nigeria's energy sector. For Otedola, the sale allows him to redirect his focus and capital towards financial services, potentially leading to new ventures and investments in this area.
