From having a humongous loan portfolio of N192 billion in 2012 via his then Zenon Petroleum and Gas Ltd which was eventually passed on to the Asset Management Company of Nigeria, billionaire businessman, Femi Otedola has today taken over First Bank of Nigeria Plc with his recent acquisition of about N30 billion worth of shares, making him the single largest shareholder of the bank.
Otedola reportedly took over the bank with the acquisition of about ₦30 billion worth of shares, making him the single largest shareholder of the bank.
Otedola, being the largest shareholder, holds the highest voting shares, giving him power to dictate the direction of the bank through his voting power.
According to sources who spoke to this news platform on the subject matter, FBN holdings will soon make a public announcement on the historic purchase of the company shares on the floor of the Nigerian Stock Exchange by Otedola.
It was gathered that Otedola has been acquiring the shares of the bank through a vehicle, Calvados Global Services Ltd. It is also likely that there could be other vehicles associated with Mr Otedola who may have also been mopping up shares.
FBNH currently has 34.7 billion of its shares floating freely meaning it is held by diverse shareholders. This makes the shares easy to acquire on the stock exchange.
The latest audited account of FBN Holdings does not have any shareholder with up to 5% of the ownership of the banking behemoth. Nairametrics understands Mr Otedola, through his proxies and investing vehicles, now owns over 5% of the bank, setting himself up to be the single largest shareholder of the bank.
It was gathered that Otedola decided to take over First Bank Nigeria because of the internal crisis rocking the bank.
Recall Otedola divested his 75% direct and indirect share holding in Forte Oil, via a merger of his company Zenon Oil and former African Petroleum in 2019, the decision raised questions as to why he made such a decision especially because of the lucrative nature of the oil and gas sector.
Just before the shares announcement, Otedola had announced that he wanted to explore and maximize business opportunities in refining and petrochemicals.
Otedola singled out First Bank despite having investments in the real estate and financial sector, for the single reason that there wasn’t exactly one man calling the shots there, unlike in other new generation banks, the report added.
Industry assumptions have often suggested billionaire Oba Otudeko is the single majority owner of the bank considering the enormous control he wielded over the bank for years. However, his latest debacle with the Central Bank following the failed removal of current MD/CEO Adesola Adeduntan marked a sudden end to his control of the bank providing an opening for Mr Otedola to move in on controlling the bank.
According to our intelligence, the billionaire through various entities may have acquired over 5% of the bank at an average price of N9 per share. According to Nairametrics Otedola already owns over 10% of the bank.
FBNH currently has a total outstanding shareholding of 39.5 billion units and a market capitalization of N423.5 billion (over a billion dollars assuming official exchange rate). According to information contained in the 2020 FY report of the bank, 40 shareholders owned 31.03% of the bank while no individual shareholder held more than 5% of the bank. Shareholders with over 5% ownership of shares of a publicly quoted company are statutorily expected to declare ownership publicly.
The financial statement of the company also states Dr. Oba Otudeko owns 532 million units or 1.3% holding of the company. Oye Hassan Odukale reportedly owns 370 million units of the bank according to the information contained in its 2020 annual reports. The billionaire owner of Globacom, Mike Adenuga is also a major shareholder of the company but is thought to own far fewer shares than Oba Otudeko and the Odukales. It is also likely that they have other shares owned by proxies but not included in the shareholdings disclosed publicly.
What the future holds
It is unclear what plans Mr. Otedola has for FBNH, but for him to have acquired this much, Nairametrics believes he has the full backing of the Central Bank. The billionaire investor has a pedigree going for him especially after successfully turning around Forte Oil and then selling it to new owners. He also acquired Geregu Power Plant during the privatization of 2013 and it is touted as one of the most efficient plants in the country.
Relying on his antecedents from previously acquired entities, majority ownership of FBNH by an Otedola backed entity will probably usher in a transformation in the bank revving up investor sentiments in anticipation.
FBNH reported a profit after tax of N38 billion in the first half of 2021 up from N35 billion same period in 2020. According to Financial Times, institutional investors like Black Rock Fund Advisors, Old Mutual Investments Group all own less than 1% individually of the bank.
Previous Turnaround at Geregu Power Plant.
In 2013 an entity controlled by Mr. Otedola Emerged as preferred bidder of the then 414-MW Geregu Power Plant under a joint venture partnership with the State Grid Corporation of China/Shanghai Municipal Electric Corporation; the largest utility company in the world by size and market capitalisation.
The plant has since been revamped, transformed, increasing the overall efficiency of the plant through a major overhaul exercise at a cost of USD 100 million dollars. Nameplate capacity increased from 414 to 435 MW and operational capacity increased to 90 percent of the nameplate capacity about 10% of the national grid.