A total of 125.01 million units of Geregu Power Plc shares valued at N12.5 billion were consummated in an off-market trades on Tuesday February 21, 2022.
According to the off-trade report obtained by Nairametrics, the deal was a negotiated deal with PAC Securities Limited (buyer) and APT Securities and Funds Limited (seller). Â
Nairametrics understands the transaction involves an acquisition of 125 million shares of Geregu Power by Afrexim Bank subsidiary, FEDA.
FEDA: The Fund for Export Development in Africa (FEDA), the development impact investment platform of African Export-Import Bank (Afreximbank) recently announced that it has received internal approvals to acquire a minority stake in Geregu Power Plc, subject to satisfactory diligence and documentation.Â
- FEDA has the obligation of providing capital towards advancing intra-African trade, export development and industrialisation in Africa.Â
- It also mentioned in a statement, said it has made a strategic decision to support leading energy platforms across Africa, including the renewables and transition fuels sectors as part of its intervention efforts in Africa’s energy sector.Â
- FEDA noted that it targets to support the business as a minority investor and work with the current owners and management team to drive the expansion of the business over the next years.Â
What this means: The FEDA acquisition of Afrexim Bank shares is the first major foreign investment of a publicly quoted company in Nigeria in 2023.
- Geregu and Afrexim announced in December that they had finalized an agreement for strategic purchase of 5% of Geregu shares by Afrexim on the NGX.
- Geregu Power shares has rallied by over 100% since it was listed last October and is currently trading at about N224 per share.
Geregu results: The company reported a earnings per share of N4.47 per share a 50% drop from the prior year as multiple system collapses and gas supply issues hampered power generation.
- However, bulls in support of the share price rally suggest the high earnings multiple is indicative of a possible ramp up of power generations and a likely acquisition of Geregu 2.
- Geregu is currently valued at over N560 billion more than double its valuation when it listed.
Off-Market Trades: Trades which are not settled through the Clearing Corporation/ Clearing House of exchange are classified as ‘’Off Market Trades”. Delivery of securities to or from sub-brokers, and delivery for trade-for-trade transactions, by this definition are off-market trades.Â
- Geregu closed its last trading day (Tuesday, February 21, 2023) at N224.00 per share on the Nigerian Stock Exchange (NGX). Â
- Geregu Power began the year with a share price of N149.00 and has since gained 50.3% on that price valuation, ranking it seventh on the NGX in terms of year-to-date performance. Â
- China’s largest power company Shangai Municipal Electric also owns equity in Geregu Power.