AMID the fuss over Femi Otedola’s divestment from the Transnational Corporation Plc (Transcorp), the company was, on Monday, May 8 at a meeting of the National Council of Privatisation in Abuja issued a discharge certificate for fulfilling its post-privatisation obligations for the Ughelli power plant in Delta state.

With the fulfilment, “Transcorp Power will no longer be subjected to post-privatisation monitoring,” the company said on Monday.

Vice President Yemi Osinbajo, who graced that occasion and presented the discharge certificate to Transcorp’s chairman, Tony Elumelu, said the “post-privatisation monitoring is an important aspect of the Federal Government’s privatisation programme.”

Otedola had on April 28 sold his stake in Transcorp in a top-secret deal 15 days after sparking interest in the company’s shares.

The unfolding drama saw Elumelu mop up more of Transcorp’s shares to raise his stake through HH Capital Limited to 25.58 per cent of the company’s total shares, The ICIR reported.

While the dust race by these billionaire rivals appeared not to have settled, Otedola, on Tuesday, May 9, reportedly opened up on the dealing.

“I offered to buy Transcorp Plc for N250 billion, but unfortunately, my offer was rejected,” Otedola said. “My goal was to maximise the company’s potential as a Nigerian conglomerate with a market cap of, at least, N2 trillion instead of the current N40 billion, but it seems some shareholders have a different vision.”

His plan on Transcorp might have been aborted, but some analysts view Otedola as a shrewd player with a penchant for acquiring viable stocks.

“The trend of his investment activity in the Nigerian capital market does appear that there is credence to the assertion people hold that he always cashes in and cashes out,” David Adonri, a capital market operator, said.

In December 2021, he acquired 2.5 per cent additional shares in FBN Holdings Plc to lift his total stake in the stock to 7.57 per cent, or 2.717 billion units, placing him as the single largest shareholder of FBN Holdings and well ahead of his then closest rival, Tunde Hassan-Odukale, chairman of First Bank of Nigeria Limited.

“He is more or less a trader. But we need some of those characteristics to bring the funds and help the stocks in the capital market appreciate,” an investment and portfolio analyst, Abel Ezekiel, said.

Meanwhile, with Otedola exiting, Elumelu seems to be consolidating on the Transcorp brand. Part of the post-privatisation deals he has achieved in quick turns is the commissioning of a 240mw Afam 3-Fast Power Plant, in Afam, Port Harcourt, on Tuesday, May 9.

Also, at the commissioning, the vice president hinted that the National Council on Privatisation (NCP) had chosen Transcorp Power as the preferred bidder for the Abuja Electricity Distribution Company, which the United Bank for Africa (UBA) had revealed a plan to sell to recover a $122m debt the company owed it.

Transcorp needs to maximise its capacity

Analysts who spoke with The ICIR believed that Transcorp was not yet maximising its potential as a conglomerate.

“Transcorp is a company with an excellent foundation and bright prosper; it does not need to do anything extraordinary to raise its profile,” Adonri, the executive vice chairman of Highcap Securities Limited, asserted.

He said, “If you look at the industry where it operates, it has a huge supply gap. I mean the energy and power industry in the natural business environment. Transcorp should be fully mobilised to explore the supply gap in products and services. The business future is very secure and bright.”

The chairman of the Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, said Elumelu’s activity as an issuer in the capital market had been felt, but argued Transcorp should be in the direction of shares that are trading above N5 and paying dividends like N30,000 and N50,000, and not N2,000 or N5,000.

“The company has a lot of prosperity and things going for it, looking at its conglomerate – oil and gas, tourism, energy and power. So, their stock is supposed to boost and be investors’ next destination regarding market price and dividend payout,” Okezie added.

When in 2008 Transcorp offered its shares subscription at about N7, it rose to almost N15 that year before the meltdown, but it is now selling at below N2, Ezekiel said.

A publicly quoted conglomerate on the Nigerian Exchange Limited (NGX) with a diversified shareholder base of approximately 300,000, Transcorp has portfolio investments in the power, hospitality, and oil and gas sectors which comprises Transcorp Hilton Abuja, Transcorp Hotels Calabar, Transcorp Power, Transafam Power, and Transcorp Energy.

Elumelu has used his influence to add some assets to the company, Ezekiel said, but “this must be reflected in its performance on the Nigerian stock exchange.”

He added, “The company’s shares are not well priced considering the asset quality. How can a subsidiary be trading higher than a parent company?” Ezekiel pointed out.

A check by The ICIR showed that the share price of Transcorp Hotel stood at N7.45 relative to Transcorp’s N1.96 at the close of trading on Tuesday, May 9.

According to Ezekiel, these are the issues Otedola has brought to the fore. Transcorp cannot pay a 3k or 5k dividend like the insurance company, he said.

“These are peanuts. They are not good for the level of Transcorp trading in the asset it is parading,” he said.

However, the acquisition by Otedola has provided liquidity for the market. Some people who bought at N1.4 and sold at N3.12 could have used the proceeds to acquire new shares to benefit the market and investors.

Transcorp needs to be higher than other companies Elumelu has created and traded like multinational companies such as Nestle, Total Mobile and others. Ezekiel added. “This is nothing more than a slap on the face of investors.”