Forte Oil to sell power unit to Otedola
Forte Oil Plc plans to enter into talks to sell its power unit to its major investor, Mr. Femi Otedola, after it failed to secure a deal via a public tender.
Forte Oil said in a statement yesterday that it was seeking shareholders’ approval in a vote on February 7 to start talks with Otedola, adding that Otedola will not take part in the vote.
Forte plans to use proceeds from the sale to expand its fuel retailing unit, its main focus.
Amperion Power Distribution Company Limited, Forte’s power subsidiary, paid $132 million to acquire a 414 megawatt power plant six years ago under a government-led privatisation scheme meant to tackle decades of chronic blackouts.
The company said Otedola had shown interest in bidding for the power unit and that his proposal would be reviewed by management and an independent adviser. A public tender to sell the power asset received “unexpectedly low interest”, Forte said, adding that pricing proposals it received did not meet its expectation.
Shares in Forte rose 2.55 percent on Thursday to 30.15 naira, valuing the company at 39.3 billion naira ($128 million).
Recall that Otedola had agreed to sell his 75 percent interest in Forte Oil’s downstream business, with the deal expected to close in the first quarter of 2019