Geregu Power to list on the Nigerian Stock Exchange

One of Nigeria’s leading Electricity Power Plant, Geregu Power Plc is set to list on the Main Board of the Nigerian Exchange (NGX) by way of introduction.

Nairametrics reliably gathers that the listing will be official on the 5^th of October 2022, making the shares of the company available for the public to buy.

This is also the second listing on the Nigerian Exchange this year and will likely be seen as a major achievement for the Exchange under the leadership of its CEO, Temi Popoola.

Geregu Makes History on listing

Geregu Power will be listing 2.5 billion ordinary shares of 50 kobo each at a share price of N100 per share valuing the company at about N250 billion on the first day.

• According to excerpts of the approval sent to Geregu and cited by Nairametrics, the Exchange will also host executives of the company at a Closing Gong ceremony to commemorate the listing.
• Geregu Power will also be the first electricity company- generation, transmission, or distribution -that will be listed on the Exchange in Nigeria’s history.
• It is also the first successor company from Electricity companies privatized in late 2013 to be listed on the Exchange.
• It is thus likely that the power plant will herald the creation of an Electricity Sub-sector for the company, paving the way for more electricity companies to list.

Fundamentals

A cursory view of the company’s income statement included in its bond prospectus reveal the company reported a revenue of N70.9 billion for the period ended December 2021 representing a 32.3% increase year on year.

• The company also reported a profit after tax of N20.5 billion in the same period up 45.2% from N14.1 billion a year earlier.
• Profits have risen at a compounded annual growth rate of 11% since it reported a profit of N13.4 billion in 2017.
• At N20.5 billion last year’s profits are also double the pre-covid year (2019) profits of N10.39 billion.
• Geregu Power Plc is also bidding for the 434 MW power plant, Geregu 2, which will make it its second power plant.
• The company declared dividends of N37.5 billion and N12.3 billion in 2020 and 2021 results respectively.
• The existing power plant has a capacity of 435 MW, which the company planned to increase to 735 MW in the medium term.

What you should know

Last July, Geregu Power announced it had successfully raised N40 billion in unsecured corporate bonds at an interest rate of 14.5%.

• The bond issue is part of the company’s N100 billion multi-instrument issuance program meant to finance capital expansion and working capital requirements.
• The bond opened on July 1 2022 and closed on the 14th of July and was reportedly oversubscribed. This is also the largest corporate bond raised by a Power Company in Nigeria.
• This also made it the first Electricity company to raise a corporate bond of that magnitude.
• The capital raise was also the largest in the power sector.

Optics

Nigeria currently generates roughly 4,500MW peak despite having an installed power generation capacity of over 12,000MW.

Part of the challenge has been the state of the national grid which experiences periodic grid collapses, affecting the ability of power plants to generate more power.

• However, partial activation instigated by the Nigerian Electricity Regulatory Commission (NERC) has led to significant improvement in power supply in recent weeks.
• This is seen as a major boost for the sector as stakeholders look forward to more improvements in the sector’s value chain.
• The Central Bank of Nigeria has also sunk in over N300 billion to aid working capital and capital expenditure spending in the sector.
• A successful listing of a power company on the Exchange could pave way for more companies in the sector to source additional capital to fund their balance sheets.

About Geregu Power

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 Company began operations in February 2007, to generate electric power supply to the National Grid managed by the Transmission Company of Nigeria (TCN).
• Amperion Power owns 99.9% of the company. Calvados holding (owned by Femi Otedola) owns 95% of Amperion Power while Shangai Power owns 5%.
• Femi Otedola is the Chairman of Geregu Power Plant while Mr. Akin Akinfemiwa is the Chief Executive Officer.
• Geregu Power will be the second company Nigerian billionaire, Femi Otedola will be listed on the Exchange.