The news about Nigerian billionaire and business mogul, Femi Otedola selling off his leading oil and gas brand, Forte Oil Plc, came as a surprise to many who wondered why he decided to leave a booming industry in the country.
Well… It is a strategic business decision which came from deliberations, a long term, and in-depth research that involved forecasting as well. Above all this move of his will help Nigeria’s economy growth through power stability .
It’s no longer news that the epileptic power supply in Nigeria has led to many businesses collapse as well as investors leaving the country. With the huge investment Femi Otedola is set to invest in power generation, the country’s economy will benefit greatly from it.
Let’s give you a break down of how this happened.
On the 24th of December, 2018 Otedola hinted explaining he had reached an agreement with the Prudent Energy team, investing through Ignite Investments and Commodities Limited, to divest of his full 75 percent direct and indirect shareholding in the company’s downstream business. This divestment was completed on Wednesday; selling his majority shareholding to Prudent Energy, a local oil trading firm.
In a series of tweets on his Twitter page on Saturday, Otedola said his business focus will now be on Geregu power plant.
His tweet reads
“A few years ago, my team and I embarked on an arduous task of transforming a moribund petroleum marketing business, African Petroleum Plc (formerly British Petroleum) into Forte Oil Plc – a leading integrated solutions provider with solid footprints in downstream petroleum marketing, upstream services and power generation and one in which we built intrinsic value to the benefits of our shareholders.
“In line with my principle of business focus, we have divested from our marketing and upstream businesses and shall from now on focus and consolidate on the gains of our power generation business, Geregu Power Plc.
“We wish our successors the very best and urge them to build on our legacies, which have been established since 1964.”
It is estimated he will invest $1 billion in the power plant.
Amperion Power Distribution Company Limited, a subsidiary of Forte Oil Plc acquired the Geregu power plant in 2013 and invested $94 million in the power plant.
After another $350 million investment in the plant in 2018, Otedola said the acquisition was a sign of his commitment to the federal government’s power sector recovery plan.
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 gas power plant began operations in 2007 with a total installed capacity of 414MW at commissioning.
Forte Oil, was originally British Petroleum. The federal government took over the oil company during the fight to free South Africa from White minority rule and renamed it African Petroleum Plc.
African Petroleum was privatised to Sodiq Oil before Otedola acquired the company and rebranded it as Forte Oil.