Thursday, September 24, 2015 11.53 PM / Proshare News & Investigations
The deal is done.
Mercurial, the world’s third largest independent energy traders and asset operators has been successful in its bid to acquire a 17 per cent stake in Forte Oil Plc, a Nigerian indigenous petroleum products marketer and power generating company.
With this deal, Mercuria enhances its goal of becoming a more vertically integrated business in the Oil trading market and offers Forte Oil access to a global market where its goal is to become a key African player in the energy and power sector.
Both the Securities & Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) have granted approvals to this landmark transaction which should net Nigerian billionaire, Femi Otedola about $200 million estimated inflow (SP –N239.99; 52 Wk Range 141.67 - 252.00 @Sept 23, 2015). The stocks sold consist of ordinary shares held by Femi Otedola (direct) and Zenon Oil (indirect).
This is a remarkable feat for a company with a market CAP of about N8 billion three (3) years ago now valued at N312.6 billion as at September 23, 2015.
We await a formal notification from the NSE after which specifics of the transaction will be explored.
About Mercuria Energy Group Ltd
Mercuria is a Swiss privately held international commodity trading company active over a wide spectrum of global energy markets including crude oil and refined petroleum products, natural gas (including LNG), power, coal, biodiesel, carbon emissions, base metals and agricultural products. In 2014, the company bought the commodities trading arm of J.P. Morgan in a reported US$800 million deal. They are the third largest independent energy traders and asset operators and are based out of Geneva, Switzerland, with 50 offices worldwide.
Mercuria moves about 1.5m barrels of crude and oil products daily, and has upstream and downstream assets ranging from oil reserves in Argentina, Canada and the US, to oil and products terminals in Europe and China, as well as substantial investment in the coal mining industry and bio fuels plants in Germany and the Netherlands. Their primary competitors are Swiss commodity houses Glencore, Trafigura and Vitol, US based trader Cargill and Hong Kong/Singapore based Noble Group.
Mercuria was founded in 2004 by Marco Dunand and Daniel Jaeggi, then executives at Phibro—the commodities trader sold by Citigroup to Occidental Petroleum in 2009—and previously at Goldman Sachs. Until 2007, Mercuria was called the J&S Group and focused mostly on oil trading. As they have expanded, they have hired away traders and investment professionals from across Europe, particularly Morgan Stanley, Goldman Sachs, Louis Dreyfus Group and Electrabel in London. Mercuria's 2013 revenue was US$ 112 billion.
It has subsidiaries worldwide, including Navitas Energy in Canada and Vesta Terminal Services in Europe, which operates port logistics, storage and processing facilities in the Netherlands, Estonia, Belgium, and Germany. Mercuria, former owner of Vesta Terminal, entered into a joint venture with Sinopec by selling 50% of the terminals in 2013.
In November 2010, Mercuria Energy bought MGM International Group from Morgan Stanley Capital Group Inc. and MGM International LLC. The Miami, Florida-based MGM International Group is developer of international projects to reduce greenhouse gas emissions and trades in global carbon markets. The company recently arranged debt financing of 2.5 billion to fund expansion through asset purchases in Europe and North America.