Nigerian billionaires Adenuga, Otedola make waves with Transcorp stakes

Recent research which sheds new light on the ownership structure of Transnational Corporation of Nigeria Plc (Transcorp), has revealed that Mike Adenuga, the founder of telecom behemoth Globacom, holds a minority stake in Transcorp, while fellow Nigerian billionaire Femi Otedola continues to increase his stake in the undervalued conglomerate.

According to data tracked by Billionaires.Africa, Adenuga, the third-wealthiest billionaire in Nigeria following Abdul Samad Rabiu and Aliko Dangote, has a minority stake of 0.86 percent in Transcorp. This puts Adenuga in the elite cohort of distinguished businessmen in Nigeria who have a stake in the conglomerate which is led by Tony Elumelu.

The recent discovery is hot on the heels of Otedola’s latest financial maneuver, as the visionary billionaire and mastermind behind Geregu Power Plc — one of Africa’s fastest-growing power-generating firms — bolstered his stake in Transcorp to an impressive 6.3 percent, up from 5.52 percent.

The acquisition by Otedola has sparked substantial off-market transactions, with United Capital Securities — an entity with ties to the acclaimed businessman and philanthropist Tony Elumelu — reportedly acquiring more than 1 billion shares in the diversified conglomerate, which has substantial investments in the hospitality, power, and oil and gas sectors

In just two weeks, the heightened buying activity surrounding Transcorp has triggered a notable 92.1 percent surge in the firm’s shares, propelling its market capitalization from N56.91 billion ($124.04 million) on April 6 to N109.3 billion ($238.34 million) as of April 25.

In line with the present valuation, Adenuga’s minority shareholding in the conglomerate is currently estimated to be worth N940.3 million ($2.05 million).

This, coupled with his sizeable 74.4-percent stake in Conoil Plc and another 25.1-percent stake in Julius Berger through his company Goldstones Estates Limited, further solidifies his standing as one of the most dominant investors in the Nigerian Exchange.

What you should know about Transcorp

Founded in 2004 to capitalize on market opportunities requiring heavy capital investment in Nigeria and across sub-Saharan Africa, Transcorp has significant investments in the hospitality, power, and oil and gas sectors.

Despite this, the conglomerate has struggled to create value for shareholders and achieve growth under the present management led by Elumelu.

The group’s profit for the 2022 fiscal year declined by 29.3 percent from N23.83 billion ($51.7 million) in the 2021 fiscal year to N16.84 billion ($36.6 million), despite a rise in revenue from N111.22 billion ($242 million) to N134.72 billion ($292.6 million).

The decline in profit can be attributed to a surge in direct costs, higher administrative expenses, and an increase in finance costs, which exceeded N16.5 billion ($35.8 million) during the same period.