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NGX Concludes First Power Sector Listing in Nigeria

Oct 05, 2022   •   by   •   Source: NGX   •   eye-icon 334 views

The Nigerian power sector and the capital market made headlines today with a landmark transaction that saw leading electricity generation firm, Geregu Power Plc list its shares by introduction on the Nigerian Exchange Limited (NGX). 


The landmark transaction complements the N1.6trn in new issuances and a $4bn Eurobond executed on the Exchange so far in 2022. NGX, being a towering component of the capital market continues to significantly expand the capital formation process, creating tremendous opportunities for investors and issuers, and mobilising savings to finance long-term investments by efficiently and effectively allocating risk capital in the form of equity or debt.


Geregu listed 2.5 billion ordinary shares of 50 kobo each at N100 per share on the Main Board of NGX on Wednesday, 5 October 2022. This implied a market capitalisation of N250bn upon listing. In a statement, the Exchange said, “Geregu Power is undertaking a listing by introduction of its entire issued ordinary shares in order to promote better liquidity of its shares in the secondary market and be better positioned to access long term capital from a wide range of local and international investors when required.”


Reacting to the development, the Chairman, Geregu Power, Mr Femi Otedola, stated that the listing of the company was the actualisation of a vision to bring world-class standards in governance, sustainability, and business processes to the Company and the Nigerian electricity sector.


He added that listing on the Main Board of NGX would ensure that the long-term growth of the company is assured, and its benefits would be passed on to their shareholders.


The Chief Executive Officer, NGX, Mr. Temi Popoola, in a statement obtained from the Exchange said, “Today's listing is a promising development in the country's power sector, and we are delighted to welcome Geregu Power Plc to the Exchange. Having Geregu listed in our market is proof of NGX's commitment to building a robust and inclusive market and creating avenues for sustainable investment. This listing will enhance liquidity for Geregu, increase its visibility among global investors, elevate its value and boost transparency, as our marketplace is a sterling platform for raising capital and enabling sustainable growth for national development.”


It will be recalled that the power company recently announced the successful issuance of its N40.085 billion Senior Unsecured Bonds under its N100 billion multi-instrument issuance programme. Also, the transaction, which represents Geregu’s debut bond issuance in the debt market was over-subscribed. The issuance which commenced on July 1, 2022, following relevant approval of the Securities and Exchange Commission (SEC) closed on July 14, 2022, with a bond yield of 14.50 per cent.


The Chief Executive Officer, Geregu Power Plc, Akin Akinfemiwa, noted that the capital raise would significantly support the company’s capital investments. “The resounding success of our debut bond offer demonstrates implicit confidence in our business by the investment community in our quest to increase capacity and contribute our own quota to the Nigerian Electricity Supply Industry (NESI)”.


“It would help us in the attainment of our long-term corporate goals; market leadership, innovation, and commitment to the highest standards of environmental, social, and corporate governance,” he added.


Notable was the huge appetite demonstrated by high-quality investors including pension fund administrators, commercial banks, asset managers, insurance companies and other corporates in spite of the rising interest rate environment due to increased borrowing activities and persistent inflationary pressures.


Subsequently, at the close of trading on the floor of the Exchange on Wednesday, investor sentiment was bullish as the share price of Geregu rose by 10.00%, driving up its market cap to N275bn. This further reinforced the value proposition for listing on NGX with the liquidity premium attached and exposure to a broad range of sophisticated domestic and international investors. An industry analyst who didn’t want to be named said, “Investors are quite optimistic about the value proposition of the company. The trajectory of its share price will be positive once the company has a good dividend yield and maximizes value for investors.”

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