Arrangements have been concluded for the listing of Geregu Power Plc on the floor of the Nigerian Exchange (NGX).
The electricity Generation Company (GenCo), believed to be owned by Lagos businessman, Mr. Femi Otedola, has a major stake, generates about 10 per cent of Nigeria’s power supply.
Regulatory documents yesterday showed that a total of 2.5 billion ordinary shares of 50 kobo each will be listed by way of introduction at N100 per share. This implies initial market value of N250 billion.
Listing by way of introduction is a method of listing that allows companies to registering their existing paid up share capital on the exchange without initial primary issuance of shares.
Extant regulatory requirement mandates the existing shareholder to provide a predetermined number of shares for commencement of trading on the newly-listed company.
Market sources indicated that Geregu Power will be listed on a new sub-sector to be created on the main board of the NGX, making history as the first power company to be listed on the Stock Exchange.
All regulatory approvals for the listing have been received and the shares may be formally listed tomorrow, according to sources in the know of the arrangements.
The listing may be preparatory to floating of the company’s initial public offer (IPO).
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Otedola had acquired Geregu Power from the Federal Government during the 2013 privatisation exercise.
In July, the power plant launched a bid to raise about N40 billion from the capital market to support its ongoing expansion project.
The N40 billion Series I Fixed Rate Senior Unsecured Bond Issue was the first tranche under the company’s N100 billion multi-instrument debt programme.
Geregu Power stated that it would use the net proceeds of the N40 billion bond to part-finance expansion of its current generation capacity and also to acquire other strategic new power assets in the country.
The GenCo had offered naira-denominated seven-year bonds at the par value of N1000 with a pricing range of between 12.75 per cent and 13.25 per cent. The bond is due in 2029 but it has a 24-month moratorium on principal repayment.
The fixed rate coupon would be paid semi-annually while the principal repayment would be by way of amortised-redemption, after the expiration of the principal moratorium period.
Geregu Power is rated Bbb+ by Agusto & Co and A by Global Credit Rating, the same ratings awarded to the issue by the rating agencies.
The power generation company at Itobe, Ajaokuta, Kogi State, was constructed by the Federal Government and inaugurated on February 16, 2007, to generate electric power and supply to the national grid managed by the Transmission Company of Nigeria (TCN).
Geregu Power is effectively wholly-owned and operated by Amperion Power Distribution Company Limited (APDCL), after APDCL acquired the remaining 20 per cent equity stake held by the government.
The government, through the Bureau of Public Enterprises (BPE), initially sold 80 per cent stake to APDCL in 2013 while it retained 20 per cent equity held jointly by the BPE and Ministry of Finance Incorporated.
The GenCo’s main business is electric power generation and sale of electric power through the national grid of the Transmission Company of Nigeria (TCN) to the Nigerian Bulk Electricity Trading Plc (NBET). The national grid serves as a “power pool” to which all the power plants and load centres are connected.
The company’s power plant consists of three natural gas-fired SIEMENS V94.2 STG5-2000E gas turbine generator units with a 435MW installed capacity. The turbine units are GT11, GT12, and GT13 and each is designed to produce 145 MW at 15.75KV, stepped up to 330kV via a 173.6MVA power transformer and now generates on average 10 per cent of Nigeria’s power.
As part of its operations, natural gas is transported by Nigerian Gas Company (NGC) from SEPLAT through a 135km, 24 inches underground pipeline in the Niger Delta at 35 bar pressure and reduced to 25 bar operating pressure. The plant supplies power directly to the national grid via the transmission switchyard.