Nigeria Content Online

Following the
misgivings arising from the strategic investment in Transcorp Plc, the
Nigerian Stock Exchange (NSE) is to mediate truce between the two
disputing parties.

A statement by the
Exchange yesterday by its senior manager corporate communications, Wole
Tokede, assured the investing public of the safety of the transaction.

“We wish to assure
the investing public that the parties involved in the transaction have
been issued letters to attend an all-parties meeting, consistent with
our desire to forge a ‘free market’ bound by rules and best practices,”
Mr. Tokede said.

Heirs Holdings
Limited, a private investment vehicle, had on Tuesday said it has
acquired a strategic stake in Transcorp Plc, but the company is
disputing this. However, the Exchange stated that investors are free to
take any investment decision, so long as it conforms to the rules of
the market.

“The Exchange
respects the right of investors in the market to enter into commercial
transactions as they deem fit and within the rules and ethics of the
bourse,” the statement said.

According to the
NSE, HH Capital Limited, through its brokers – BGL Securities Limited,
informed the bourse of its desire to cross 1,970,754,364 units of
shares from willing sellers on March 31, 2011.

“In the course of
the review of the transaction, the Exchange realised that one of the
willing sellers was legally not in position to engage in such a
transaction and this was immediately cancelled,” it stated.

Transcorp’s petition

Last week,
Transcorp sent a petition to the Securities and Exchange Commission
(SEC) claiming that the huge volume trading on its shares on March 31,
2011 was not consistent with market rules.

The firm stated
that a total of 2.51 billion units of its shares representing 10 per
cent of the company’s issued share capital were traded in a single day,
and were shocked at how the transaction was approved by the Stock
Exchange, without information and consent of shareholders and the
company.

“The board and
management hereby object to such a transaction and request that due
process and the provisions of law be allowed where an individual or
group of individuals are interested in a controlling stake in the
company,” the management of Transcorp said.

Heirs Holdings
Limited, in a statement by its director of marketing and corporate
communication, Jenika Mukoro, said that Transcorp shareholders will
benefit from the transaction.

“Our chairman, Tony
O. Elumelu, who was a founding director and investor, believes strongly
in the founding vision of Transcorp as a means for Nigerians to access
the abundant economic opportunities present in the country through the
capital markets,” the statement said.

Shareholders benefit

Victor Ogiemwonyi,
the managing director of Partnership Investment Company Limited, an
investment banking and brokerage firm, said the move would benefit the
shareholders.

“There is nothing
wrong with the transaction. Somebody has bought the shares and he
disclosed his interest. That is all the law requires,” Mr. Ogiemwonyi
said.

According to him, the entrance of a new investor would bring fresh ideas into the company.

“My hope is that
they will rid the company of its bad assets and invest massively in the
tourism and hospitality sector. Tony (Elumelu) has a track record of
turning things around and I hope he will continue with Transcorp,” he
said.

Following the
botched purchase of the national carrier, Nigeria Telecommunications
Limited (NITEL) in June 2009, shareholders of Transcorp had been
waiting on the sidelines, as its share price slumped from a high of
N9.70 to the minimum 50 kobo.

However, hope was
rekindled when Transcorp entered into a joint venture agreement on
March 1 with SacOil Holdings Limited of South Africa (SacOil) to
develop its oil field in collaboration with Energy Equity Resources
Limited (EER).

Sacoil paid $30
million to acquire 20 per cent of the lucrative OPL 281. Since then,
the company’s shares have been on the increase.

However, the firm’s
shares began to record tremendous upswing when information filtered
into the market that a new entrant was taking position. Since then, the
price has risen steadily, closing on yesterday at N1.33, a growth of
166 per cent in less than five weeks.

Transcorp has interests in hotels, agriculture, oil and gas sectors.