$1.2bn power listing lights up Nigerian exchange

A power generator energized the Nigerian exchange with a NGN 1.8 trillion ($1.16 billion) boost to market capitalization, after listing 7.5 bn shares yesterday (4 March) at NGN 240 per share. Transcorp Power Plc listed its shares by introduction onto the Main Board of the Nigerian Exchange Limited (NGX).

In today’s trading (5 March), the shares climbed 26% to close at NGN 290.40 with more than 87 million shares traded. On the first day (4 March), 40m shares traded and the price climbed 10% to NGN264. Listing by introduction means the shares are added to the boards for trading without any public share offer or capital raising.

At the listing, Transcorp Group chairman Tony Elemulu said that current shareholders would offer a portion of their shares to create liquidity in the market and enable institutional investors and members of the investing public to acquire shares. He also forecast a public offer.

It is the first listing of 2024 on the NGX. Transcorp Power is the second power company, following fellow generator Geregu Power Plc., which added NGN 250 billion to market capitalization on 5 October 2022 when it listed 2.5 billion shares at NGN 100 each.

More about Transcorp and its power

On Monday after the listing, Peter Ikenga Chief Executive Officer of Transcorp Power, told a presentation called “Facts Behind the Listing” to highlight the company’s performance and strategy.

The company had started as a government-owned asset into a leading private sector organization. Mr Ikenga said Nigeria’s power generation sub-sector is key to economic growth. He said the firm is making the best use of its 18 gas turbines: “Through effective maintenance and upgrading programmes, Transcorp Power has continued to ensure optimal performance of its turbines. Whilst installed capacity has remained same in the past few years, Transcorp Power has been able to steadily improve on its capacity utilization rate. In 2023, the Company’s utilization rate stood at 78%.”

According to this press release and the website, the company operates the single cycle 972MW installed capacity Ughelli Power Plant in Delta State. Capacity was 160MW at the time of acquisition and within the first 4 years after acquisition it beat the 5-year target of 670MW set by the Bureau of Public Enterprises.

Parent company Transnational Corporation Plc (Transcorp Group) is also listed on the NGX with market capitalization of NGN 638bn. Its mission is to improve lives and transform Africa. It holds strategic investments in power, hospitality, and energy. Transcorp Power and fellow group subsidiary Transafam Power (a core investor in Afam GenCo with an installed capacity of 966MW at Okoloma Village, in Rivers State) provide 15% of Nigeria’s installed power capacity. Transcorp Power also supplies electricity to the ECOWAS Regional Electricity Market. The Group also aims to develop the domestic energy value chain by investing in offshore prospecting licence OPL287.

Evans Okpogoro, Chief Finance Officer of Transcorp Power, said revenues had grown impressively over the past 5 years, driven by a surge in energy delivery and capacity charge, coupled with the lucrative expansion into international markets. It had sustained and grown its EBITDA margins (Earnings Before Interest, Tax, Depreciation and Amortization is a measure of operating financial performance).

Another listed group subsidiary is Transcorp Hotels Plc, market capitalization NGN 1 trillion, which owns the Transcorp Hilton Abuja and other brands including Transcorp Hotels Calabar and Aura by Transcorp Hotels.

NGX key partner for privatizations and growth

Alhaji Dr. Umaru Kwairanga, Group Chairman of Nigerian Exchange Group, said the listing was a testament to the resilience, innovation, and excellence within Nigeria’s power sector and the NGX’s role in fuelling economic growth and development in our nation: “We as an Exchange are determined to ensure that all sectors of Nigeria’s economy are fully represented on NGX and that the transparency, sustainability, ethical values, and private sector dynamism that drives the Exchange drives the economy.”

He added that the listing “is a clear signal of the transformative journey our energy sector has embarked upon, thanks to the Electric Power Sector Reform Act and subsequent market liberalization.”

Jude Chiemeka, Acting CEO of NGX, stated that NGX is not just a platform for trading stocks: “it is a catalyst for economic growth and development, and we recognize our responsibility in supporting the government’s privatization efforts, particularly within the energy sector… NGX serves as a viable platform for the privatization of energy companies, driving efficiency, innovation, and sectoral growth.”

“Africapitalism is a call to action for businesses to promote development in communities and nations they operate, which will ultimately help businesses become more profitable, provide a healthy and educated work force and create entrepreneurs who become suppliers and service providers.

“This is a standard we strongly stand by and creating sustainable value for our stakeholders is a goal for us as a Group.”