Billionaire investor and businessman, Femi Otedola, has revealed plans to shift focus to power generation with a planned investment of up to $1 billion into Geregu Power Plc. This follows his recent sale of Forte Oil Plc.
Earlier, Nairametrics reported that the full acquisition of Forte Oil Plc by Prudent Energy Services Ltd took place after months of it being in the works.
The business tycoon took to his Twitter and Instagram pages to announce his latest money moves and plans for Geregu Power Plc.
In line with my principle of business focus, we have divested from our marketing and upstream businesses and shall from now on focus and consolidate on the gains of our power generation business, Geregu Power Plc.
— Femi Ote$ (@realFemiOtedola) June 22, 2019
From Forte Oil to Geregu: The purchase of Geregu was done in 2013 during the power sector privatization, under Amperion Power Distribution Company Limited which is a subsidiary of Forte Oil Plc. After the acquisition, $94 million was initially invested in the power plant. In 2018, another $350 million was pumped into the plant. Otedola said the acquisition/investment is demonstrative of his commitment to the Federal Government’s power sector recovery plan.
Geregu Power Plc was incorporated in November 2006 as one of the unbundled companies from the now-defunct Power Holding Company of Nigeria (PHCN). The gas power plant began operations in 2007 with a total installed capacity of 414MW at commissioning.
Otedola sold his entire 75 percent majority stake in the oil marketing company to Prudent Energy, thereby signaling his intention to wrap up his nearly 20 years dealing in the oil business.
When asked on his Instagram post, why he sold his full shares of the company instead of keeping a minority share and being in the background while retaining Forte Oil, Otedola replied the user, “you can’t have it all”.
Forte Oil was originally British Petroleum. The Federal Government took over the oil company during the fight to free South Africa from White minority rule and renamed it African Petroleum Plc.
African Petroleum was then privatised to Sodiq Oil before Otedola acquired the company and rebranded it as Forte Oil.
What this means: By navigating towards power from the oil business, Otedola has shown that the business environment is changing and the power sector is likely to appear more sustainable and profitable than the former. This bold step can be considered a trailblazer for those who would be migrating sectors in the future. It may also prove useful in the attempt to solve Nigeria’s electricity problem once and for all.