Business

Femi Otedola Gets Approval To Purchase Forte Oil Power Assets

The next business move of Forbes-listed Billionaire, Mr Femi Otedola, has been revealed. His first acquisition will be in the power industry.

The amiable yet shrewd and forward-thinking business mind has just recieved the approval of shareholders to enter into negotiation to purchase the power assets of Forte Oil Plc.

Since the divestment of his majority shareholding from Forte Oil, speculations were rife and the rumour mill has been agog but Otedola, who likes cooking his business dishes silently away from the prying eyes of the media, has just taken the first of many steps in his new direction.

According to a Forbes Africa Report ” Last December, Otedola sold his controlling stake in Forte Oil to Prudent Energy, a local trading firm, at a value insiders say was in the region of hundreds of millions of dollars – a significant premium to its market value at the time. In an effort to restructure the company, the new owners opted to divest its power generating and upstream services businesses in order to focus on its core oil marketing business.

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“Forte Oil subsequently put out a public tender to sell the power asset, but the tender received low interest and pricing proposals that did not meets its expectation.

“Otedola, 56, submitted a bid for the power unit, which was reviewed by management and an independent adviser. On Thursday, at an Extra-Ordinary General Meeting (EGM) of the firm in Lagos, shareholders gave an approval to Forte Oil’s board of directors to enter into talks with Otedola to acquire Forte Oil’s power unit.

“The decision was arrived at by a voting process which saw 90.9% of the shareholders approve that Forte Oil may enter into discussions with Femi Otedola or his investment holding companies in connection with the assets to be divested although subject to an independent valuation on fair value.

“In compliance with the Nigerian Stock Exchange (NSE) rules relating to board meetings and General meetings of Issuers, Otedola and his companies – Zenon Petroleum and Gas Limited and Thames Investments limited, which still own some Forte Oil shares, were excluded from voting at the EGM.

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“In 2013, Amperion Power Distribution Company Limited, Forte Oil’s power subsidiary, paid $132 million to acquire the 414-megawatt Geregu power plant under a government-led privatization scheme meant to confront decades of chronic power outages in Nigeria. In December 2017, Forte Oil invested close to $100million to increase the generation capacity of the plant from 414-megawatt to 434-megawatt of electricity. A spokesperson for Otedola confirmed to this reporter that the Nigerian businessman divested from the oil marketing business in order to focus on the power generation and distribution business, and is aggressively shopping for reasonably priced assets in Nigeria.

Forte Oil’s share price jumped 10% on Friday to N29.7 (8 cents) on news of shareholder approval for the deal”

Otedola who is applauded in Nigerian business circles for his penchant to play by the rules has been known to walk away from juicy deals over propriety issues.


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