Demand for Transcorp Stocks Surges After Purchase of Afam Power

November 9, 2020
transcorp power Afam Power

By Dipo Olowookere

Since the transfer of Afam Power to Transcorp Plc last week in a N105 billion deal, the demand for the latter’s shares on the Nigerian Stock Exchange (NSE) has continued to rise.

In the five-day trading week, Transcorp was the second highest gainer on the Lagos exchange, appreciating by 19.72 per cent to close last Friday at 85 kobo per share.

In the previous week, the share price of the conglomerate closed at 71 kobo but the news of the acquisition of the natural-gas-fired power generation facility located in Oyigbo, Rivers State made the company’s stocks to swallow 14 kobo at the market.

Business Post reports that this morning, Monday, November 9, 2020, just about an hour into the commencement of trading activities on the bourse, shares of the organisation have already gained 9.41 per cent or 8 kobo, trading at 93 kobo per unit. Nearly one million units of the equities have been transacted by investors as at press time.

It is believed that the purchase of Afam Genco, otherwise known as Afam Power, will boost the revenue of Transcorp Plc and translate to more value for shareholders.

The Afam Power has a combined installed capacity of 966MW and according to Transcorp, “This investment deepens our play in the power sector and takes our overall installed generation capacity as a business to 1,936MW from 972MW installed at Transcorp Power located in Ughelli, Delta State.”

The acquisition of the power plant is “in line with our ambition to generate 25 per cent of Nigeria’s electricity requirements.”

Business Post reports that the Afam Power was formerly owned by the defunct Power Holding Company of Nigeria (PHCN). It was among the nine power assets the federal government put up for sale this year to raise funds for some critical projects in the country.

Transcorp will be expected to first pay 25 per cent of the N105 billion the government sold the power plant and then later pay the balance of 75 per cent.

It would be recalled that in October 2019, Transcorp Power Consortium was announced as the preferred bidder for the Afam Electricity Generation Company by the National Council on Privatisation (NCP).

The energy company was transferred to Transcorp last Thursday by the federal government the signing ceremony of the Share Sale Purchase Agreement (SSPA).

Vice President Yemi Osinbajo represented the federal government along with the Director-General of the Bureau of Public Enterprise, Mr Alex Okoh, while the Chairman of Transcorp Plc, Mr Tony Elumelu, represented the new owners.

Before this deal, equities of Transcorp had been battered and it was almost becoming a commodity investors were running away from.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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