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Eyebrows Raised over Geregu’s N2.9 Trillion Valuation as Analysts Flag Discrepancies

Market experts have cast doubts on Geregu’s N2.9 trillion valuation, flagging discrepancies in turnover and financial activity.

Some stock market analysts have expressed concerns over the market capitalisation and share price movement of Geregu Power as well as that of FBN Holdings Plc, which are both listed on the Nigerian Exchange Limited (NGX).

Precisely, in comparing Geregu Power’s share price performance with that of telecoms giant, MTN Nigeria Communications Plc, they pointed out that while the market capitalisation for MTN hit about N4.5 trillion last year, that of Geregu Power surged to N2.9 trillion as at December 6, last year.

Curiously, in its financial statement for 2023, the turnover for MTN was N2.472 trillion, whereas Geregu recorded a turnover of N82.908 billion as of December 31, 2023.

Commenting on the findings, a stock market analyst who preferred to remain anonymous, noted that, “If you look at it carefully, you will see that Geregu’s market capitalisation is over 20 times its turnover, while that of MTN is different, which for me doesn’t add up. So, people would keep raising concerns over important things like that.

“Why does this matter? Essentially, Geregu is a cash cow that its Chairman, Femi Otedola uses to borrow money to mop up FBN Holdings shares from the NGX. He has just borrowed $45 million from Afreximbank against FBN shares.

“The point is that Geregu is owed power sector debt like  other players in that sector and has little economic activity, so, why would it have a market capitalisation of N2.9 trillion? What drives it?

“There are allegations that those shares are sexed up to fund the acquisition of FBN shares. So, for FBN Holdings, the biggest problem it faces is its financial accounts. The financial institution was in a loss position in 2021 until it did a deal with General Hydrocarbon Limited (GHL).

“That deal was conditioned on them funding the GHL’s oil well, and they suddenly failed to fund the oil well.”

This failure has caused huge losses to GHL which is currently seeking redress in court.

Kayode Tokede 

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