Nigerian tycoon Tony Elumelu-linked power company pays off foreign currency loan

Transcorp Power, the recently listed energy arm of Nigerian conglomerate Transnational Corporation of Nigeria Plc (Transcorp), led by businessman Tony Elumelu, has announced the complete repayment of its foreign currency loans, including the $215-million acquisition loan utilized to acquire Ughelli Power Plc.

In a recent investor presentation, Transcorp Power disclosed its successful repayment of all foreign currency debts, marking a milestone for the company. The $215-million acquisition loan, initially secured to obtain a 100-percent stake in Ughelli Power Plc, has been fully settled. This repayment underscores Transcorp Power’s commitment to financial prudence and solidifies its position for future capital expenditures.

The acquisition loan, originally structured in 2022 with an interest rate of 8.5 percent plus LIBOR, had approximately $1.6 million outstanding. Despite an expected inflow in December 2023, the final repayment was completed in January 2024, earlier than anticipated — the early repayment will enable Transcorp Power to channel foreign currency cash flows toward financing its capital expenditures effectively.

Financial performance and growth trajectory

Transcorp Power emerged as a leader in Nigeria’s power generation sector following the 2013 acquisition of the Ughelli Power Plant by Transnational Corporation of Nigeria Plc under Tony Elumelu’s leadership. Subsequent strategic acquisitions, including the Afam Power Plant in 2020, solidified its position with an installed capacity of roughly 2,000 MW.

Recent annual reports highlight a robust 57.3-percent increase in revenue, rising from N90.35 billion ($69.17 million) in 2022 to N142.12 billion ($108.8 million) in 2023. This growth is attributed to strong performance across all business units, with energy delivery and capacity charges experiencing significant gains.

Transcorp Power’s profits soar 74.9 percent

The surge in revenue translated into a substantial 74.9-percent increase in profit, reaching N30.23 billion ($23.15 million) by the end of fiscal 2023. This impressive earnings growth solidifies Transcorp Power’s position as a frontrunner in Nigeria’s energy sector, further bolstering investor confidence in its long-term sustainability and profitability.

The company’s successful repayment of foreign currency loans underscores its financial resilience and strategic foresight in a dynamic economic environment. With a strong revenue and profit trajectory, Transcorp Power remains well-positioned for continued growth and innovation within Nigeria’s energy sector.