Nigerian energy tycoon Femi Otedola has concluded the sale of his 75% stake in Forte Oil, a publicly listed oil marketing company, to Prudent Energy, a local oil trading firm.
In a message he posted on Wednesday on his Instagram page where he has more than 650,000 followers, the businessman announced that the sale has been completed and he is now prepared to focus on Nigeria’s power sector.
“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,” Otedola said.
Last December, Forte Oil announced that its controlling shareholder, Otedola, was selling off his interest in the company. A disclosure notice sent to the Nigerian Stock Exchange (NSE) had said that Otedola reached an agreement with another energy firm, Prudent Energy.
“Otedola’s divestment from the downstream business is pursuant to his decision to explore and maximize business opportunities in refining and petrochemicals,” the disclosure sent to the Nigerian bourse said.
The financial details of the transaction were not disclosed, but a highly placed Investment Banker told this reporter that Otedola sold the shares at a “very significant premium” to its current value. A banker who worked on the deal says Otedola sold the shares for $250 million. Forte Oil’s current market cap stands at $125 million as at the close of business on Wednesday.
Otedola is now focusing squarely on the power sector, and has started acquiring power generation and distribution assets in Nigeria. In February, an investment vehicle controlled by Otedola received approval from Forte Oil’s shareholders to enter into negotiations to acquire the power business of Forte Oil. Discussions are ongoing.
Femi Otedola, one of Nigeria’s richest men, acquired a controlling stake in African Petroleum, a struggling petroleum marketer in 2008 and transformed it into Forte Oil. At its peak in 2015, Forte Oil had a market capitalization of more than $1.4 billion. Otedola last featured on the FORBES list of billionaires in 2015 with a fortune estimated at $1.8 billion at the time. As one of Nigeria’s most prominent philanthropists, he recently donated $6 million to construct a multi-storey building at the Augustine University in Epe, Lagos, and has recently spent hundreds of thousands of dollars footing the hospital bills of prominent Nigerian celebrities with life-threatening ailments.
A spokesperson for Otedola did not respond to a request for comment as at the time of filing this report.