Many people have often wondered how Tony Elumelu got involved with Transcorp. How was Transcorp before Tony Elumelu? Why did he develop interest in Transcorp and how did he acquire it. In this feature, we’ll be presenting what happened with Transcorp and how Transcorp was acquired by Tony Elumelu as the major ahareholder: the true story.
This is a story narrated by Nonso Okey Okpala. Here, you get to know the true story surrounding Transcorp’s acquisition.
What Happened with Transcorp and How Transcorp was acquired by Tony Elumelu as Major Shareholder: The True Story
1. The old Transcorp, before it was acquired in 2006 by Tony Elumelu and other investors, performed badly in the market. The value was low. The profitability of the company and the assets it had were low.
2. The private placement was sold around 2006 cheap at 1 naira per share and value. It took only discerning investors to see then. The idea was super. Otedola and others were part of the original concept, supported by Obasanjo. The private placement was successful.
3. BGL, a company where Elumelu owned 60% as at that time was behind the packaging of the sales of the private placement, and there is also strong possibility that Tony owned some stakes in Transcorp then as well before he made the major move.
4. The second phase of emergence of Transcorp was the public offering at 7 naira in 2008. At that point, things were still going on well.
Now, sometimes, people wonder why the shares of Transcorp Group isn’t performing well, and why the value of the company remains low after the projection that the group and company would do well. Let’s take a look.
Why Transcorp Group Shares aren’t Performing and while the Group is still Valued Low?
5. Part of the issues was the market crash of 2008. The price couldn’t go beyond 10 naira as expected. The original projection was a price of 20 naira.
6. Due to the market crash, the company couldn’t raise more money for its operations, having invested all its funds in purchase of the then Nicon Noga Hilton hotel and some other assets, they have to result to borrowings at high cost.
7. There came board issues with who should be chairman, bring in MD and etc. Okereke Onyiuke seemed to have upper hands but the market was down, other major stakeholders won’t bring money, she has to go on loans to sustain the company.
8. Itsegohi- the MD she brought in as turnaround Manager could do nothing. Nicholas Okoye should have been the ideal but he remained an ED.
9. The much borrowings and negotiations took away the rights of other major stakeholders as Tony emerged the major force.
Source: Nonso Okey Okpala