Afreximbank set to buy shares in Femi Otedola's Geregu Power

The Fund for Export Development in Africa (FEDA), the impact development arm of Afreximbank, the African import-export bank led by Benedict Oramah, plans to buy shares in Geregu Power Plc, a leading power-generation company majority owned by Nigerian billionaire Femi Otedola.

“Geregu Power Plc hereby notifies the Nigerian Exchange Limited and the investing public of its discussions with the Fund for Export Development in Africa (FEDA) for the acquisition of a portion of Geregu Power Plc shares,” the company’s secretary said in a statement.

The move, announced on the Nigerian Exchange (NGX) during trading hours on Fri., Dec. 2, comes nearly two months after the Otedola-led power-generating company successfully listed its shares.

Although the specifics of the proposed transaction are currently unknown, discussions are ongoing as both parties move negotiations to a more advanced stage.

Geregu, a spin-off subsidiary of the now defunct Power Holding Company of Nigeria, successfully listed its shares on the Nigerian Exchange on Oct. 5 at a price of N100 ($0.231) per share, giving it a market capitalization on the local bourse of N250 billion ($579 million).

The company’s shares have increased by 22.8 percent since they were listed on the Nigerian Exchange, from N100 ($0.225) on Oct. 5 to N122.8 ($0.276) on Dec. 3 as retail investors, investment banks, and hedge funds continue to buy into the power company.

Geregu has grown into one of Nigeria’s largest power-generating enterprises under Femi Otedola’s ownership, using gas turbines as a clean energy source to generate power.

At the end of its fiscal year in 2021, the power-generating company, Otedola, reported a profit of N20.55 billion ($47.32 million), owing to a double-digit percent increase in revenue.

Despite disruptions in the Nigerian power sector, revenue increased from N53.67 billion to N70.97 billion ($163.4 million).