THE TRIALS AND TRIUMPHS OF BUSINESS WUNDERKINDS
INSPIREDLIFE
with LANRE ALFRED
Gentleman of Leisure @60: How Femi Otedola Turns Vision to Profit, Opportunities to Goldmine
In his latest Instagram post, billionaire magnate Femi Otedola, chairman of Geregu Power, dubbed himself the ‘Gentleman of Leisure’, sending his greetings to his followers from Venice, Italy, last Sunday. Indeed, Otedola is a prophet of enterprise. Undoubtedly, he is one of the illustrious popes of commerce, robed and mitred in the resonance of their exploits. He is the artist who paints beautifully on canvas with his feats even as he writes wonderful poetry by his exploits
In a matter of days, on November 4, Otedola would hit the mark of 60 years, swelling the number of very lucky sexagenarians with unrelenting energies. That the last six decades of the hugely successful and astute businessman are packed with twists and turns worthy of a potential box office is not in question. Femi Otedola did not only walk the tightrope to the pinnacle of entrepreneurial success; he emerged stronger from situations that tend to confine many to terminal illness, if not to their untimely demise. Of fact, not many businesspeople of Nigerian extraction could lose about $1.5 billion and bounce back in a big way as Femi Otedola did.
HEADSTART HALTED BY CRUDE PLUNGE
His background as the first son of a former governor of Lagos, the late Sir Michael Otedola, notwithstanding, Femi’s entrepreneurial journey did not take off on a platter. His present status had an echo in his childhood when he had his first business at the age of six.
“It was called FEMCO. I’d offer to groom my parents’ guests’ nails. Then, write a receipt and charge them for my service. They paid me too. I always had an interest in business,” he stated.
This certainly set the tone for the young Otedola, whose business mind was further sharpened under the tutelage of his father, who then had a printing press. Femi Otedola ran the marketing side of the family printing press in the late 1980s, which served as a springboard to becoming a name of national, continental and global reckoning.
Otedola’s inroad into the oil business was fortunate and intentional. “Being the son of a governor, Otedola had friends in government who supplied him with diesel. Friends that didn’t do his business any harm down the years. When the political climate changed, the supply stopped. He made enquiries and approached a company for fresh supplies of diesel.
Something triggered in Otedola when he “saw a clanking, broken-down truck deliver supplies to his house three days after placing the order. He decided to open his own, more efficient, diesel supply business,” a Forbes report stated.
“I started buying diesel from a guy who had control of the market for retailing. I soon realised that a lot of companies in the country actually used diesel. I once received an order from a big transport company. The banks were closed, and I could only offer a cheque,” he added. “I was my supplier’s biggest customer, but he refused to take a cheque from me. I immediately realised I needed to source alternative methods of getting my diesel.”
Otedola’s crazy ambition pushed him to approach the new management of the depot and offered to buy it for $20 million ($16 million more than its actual worth of $4 million at the time).
“I contacted Zenith Bank, sold my pitch on the venture and how we would finance it. I had a meeting that barely lasted 10 minutes with Jim Ovia; he believed in me, and it was a done deal. This was in 2003,” Otedola said.
It took Otedola a relatively short period to take overwhelming control of the diesel supply infrastructure, with his Zenon Petroleum and Gas Limited holding 91 per cent of the market. The success spiralled in his setting up F.O. Transport and Seaforce Shipping – a transport and shipping company in line with the logistics attached to diesel supply, thereby completing the take-over of the entire chain. This was followed by his foray into property and buying into a string of other large companies. He was able to achieve these monumental successes within the span of seven years. By the time he was 42, he had only the oil industry’s biggest giants, like Total and Mobil, as competitors. With his ingenuity, he was dictating the pace, setting the diesel price and supplying his competitors. Otedola’s business ingenuity took Zenon from an unknown quantity to being the largest diesel importer in Nigeria – a good underdog story.
“While my competitors were sleeping, I was busy strategising. I was liberal too. My strategy was: high volumes, little margins. I was very excited at this point,” the mogul noted. “However, I knew that at some point, the government would fix the power issue, and I needed to move a step forward.”
Stoutly solvent, Zenon then bought a 28.7 per cent stake in African Petroleum (AP), which was increased to 55 per cent (at the cost of $400 million at the time). Everything was fine until the worst happened – the crude oil prices plunged from $146 to $36. It was a period that brought Otedola’s intransigence and faith to the fore.
Narrating his ordeal, Otedola said he almost committed suicide.
“We took a very big hit, and I lost about $1.5 billion, plus interest, in the process. When the oil prices were dropping, I saw it all coming. I could see myself losing big money. I had diesel worth $400 million on the high seas,” he further explained. “It didn’t look good. I’m a capitalist, though. It was great while the money was rolling in. Now that I lost so much, it was also time to face the tune. It was a very low time for me, and I explored different options, including suicide, but ultimately, I knew I had to solve this problem. My debts had to be paid.”
Wasn’t it interesting that the banks that ran after customers to get money from Otedola for their accounts in the past sent tough-looking men to his house to retrieve his debts in the mornings?
“The only people I’d credit at this point were my wife for her great support, Jim Ovia of Zenith Bank and Segun Agbaje of Guaranty Trust Bank who understood the situation and offered a restructure of the loans for ease of payment. I was, however, determined to pay it all up and move on. The banks sold the debt to Asset Management Corporation of Nigeria. It was a total of N200 billion ($1.2 billion at the time),” he remarked.
What turned out to untie Otedola from the quandary of that era was his decision not to muddle things up by separating his personal fortune from his business. While Zenon became insolvent, he stayed afloat. Asset Management Corporation of Nigeria (AMCON) waded in and bought the debt for $867 million. They valued the Zenon assets, his property company and other existing assets, to which he added some cash, and there was a court settlement. He had also started selling his bank shares, before the big plunge. It dragged on for four years.
“The most important lesson I learned is that no one is invincible. No matter how high up there you are today, you can lose it all tomorrow if you’re not on top of your game. I also learned that being a good entrepreneur does not necessarily make you a good business manager. I learned to keep my hands off managing and leave it in the hands of experts,” Otedola revealed.
Femi Otedola has distinguished himself from his contemporaries. His chutzpah to take a plunge when and where others develop cold feet stands him tall above his peers. His virtues and ideals have seen him elevated and celebrated by many. The Epe-born magnate has held several board memberships, including President of the Nigerian Chamber of Shipping and as past chairman of Transcorp Hilton Hotel, Abuja. He was appointed member of the governing council of the Nigerian Investment Promotion Council in January 2004, and in December of the same year, he was appointed a Member of the Committee saddled with the task of fostering a business relationship between the Nigerian and South African private sectors.
He was a member of the National Economic Management Team from September 2011 to May 2015 and the Honorary International Investors Council under the leadership of Baroness Lydna Chalker. Otedola was further recognised for his immense contributions to the growth of the Nigerian economy with the conferment of the prestigious National Honour of Commander of the Order of the Niger (CON) in May 2010
STUNNING COMEBACK – THE REBOUND ERA
Typically, comeback stories focus on either the people who achieve great things and then have a major setback that almost destroys everything they’ve worked for or those who start from nothing, experience major setbacks, and still find a way to impact the world. Either way, Otedola’s is one of the greatest comebacks in Nigeria’s business milieu. He has gone ahead to pick his lessons and emerged better for it. Otedola has since adopted a different business approach which he described as “very risk averse and content.”
His attention shifted to African Petroleum, having sold off his Zenon assets. Now made of sterner stuff, he engineered an overhaul in 2011 that saw him sack all staff at African Petroleum (with a mouth-watering severance package) and rebrand African Petroleum to Forte Oil.
Forte’s rise was frenetic, just like Otedola’s recovery and return to global prominence.
“I also made a decision not to run the business as I had failed at running it well. I then brought in a crop of fresh young talented guys to take over. I wanted fresh, brilliant minds and ideas,” he stated. “I wanted to build an institution based on the best corporate governance practices; a whole new direction.”
Forte’s rise was frenetic, like Otedola’s recovery and return to global prominence. Forte Oil owned more than 500 retail outlets across Nigeria. Its growth was unprecedented. By half year 2014, its revenue grew by 33 per cent to $511.18 million against $385.03 million in 2013. The company’s power generation arm from Amperion Power contributed significantly to revenue. A major plant overhaul commenced in 2015 and was completed in 2016, increasing the combined capacity to 435MW. In 2013, Amperion Power Distribution Company Limited, Forte Oil’s power subsidiary, paid $132 million to acquire the 414-megawatt Geregu power plant under a government-led privatisation scheme meant to confront decades of chronic power outages in Nigeria. Otedola joined the board of Geregu Power Plc as chairman of the board of directors in November 2013. In December 2017, Forte Oil invested close to $100 million to increase the plant’s generation capacity from 414-megawatt to 434-megawatt of electricity.
Seeing Forte to an unassailable height as a business entity in Nigeria and beyond, the energy tycoon decided to take up a new challenge and concluded the sale of his 75 per cent stake in Forte Oil to Prudent Energy. In a message he posted on his Instagram page, Otedola announced that the sale of Forte had been completed and he was now prepared to focus on Nigeria’s power sector.
“A few years ago, my team and I embarked on an arduous task of transforming a moribund petroleum marketing business, African Petroleum Plc (formerly British Petroleum), into Forte Oil Plc; a leading integrated solutions provider with solid footprints in downstream petroleum marketing, Upstream Services and Power Generation and one in which we built intrinsic value to the benefits of our shareholders,” he explained.
He added, “In line with my principle of business focus, we have divested from our marketing and upstream businesses and shall from now on focus and consolidate on the gains of our power generation business, Geregu Power Plc. We wish our successors the very best and urge them to build on our legacies which have been established since 1964.”
Otedola’s Midas Touch would also rub off on Geregu Power Plc. Originally constructed by the federal government and commissioned into service in February 2007 to generate electric power and supply to the national grid managed by the Transmission Company of Nigeria, the plant is owned and operated by Amperion Power Distribution Company Limited, holding an 80 per stake and 20 per cent retained by federal government jointly held by Bureau of Public Enterprise and ministry of finance.
The power plant consists of three simple cycle natural gas fired SIEMENS V94.2 STG5-2000E gas turbine generator units with a 435MW Installed Capacity. The turbine units are GT11, GT12, and GT13 and each is designed to produce 145 MW at 15.75KV, stepped up to 330kV via a 173.6MVA power transformer and now generates on average 10 per cent of Nigeria’s power.
As recently as days back, he made history with Geregu power Plc when it was admitted into the main board of the Nigerian Exchange Limited (NGX) by listing by introduction with the admittance of 2.5 billion ordinary shares of 50k each at N100 per share on the exchange. By doing so, Geregu became the first generating company to be listed on the NGX main board, a listing segment for well-established companies with demonstrable records of accomplishments.
The listing of Geregu’s shares also added N250 billion to the market capitalisation of NGX, further boosting liquidity in the Nigerian capital market and providing opportunities for wealth creation. Geregu Power’s stock gained 10 per cent (N10) m on its first trading day on the NGX to close at N110 per share from N100 per share it was listed by introduction. The gain pushed its market capitalisation to N275 billion from the N250 billion it was listed. The leading power generation company traded 8.5 million shares at N935 million in one day as its listing further boosted liquidity in the Nigerian capital.
To mark the significance of the listing, a closing gong ceremony was planned for the last week of October 2022.
Speaking on the listing, the Executive Chairman of the GPP’s board of directors, Femi Otedola, stated that “the listing of the company was the actualisation of a vision to bring world-class standards in governance, sustainability, and business processes to the company and the Nigerian electricity sector.”
He added that “listing on the main board of the Exchange will ensure that the long-term growth of the company is assured and its benefits will be passed on to our esteemed shareholders.”
Commenting on the development, the chairman of NGX, Mr Abubakar Mahmood, said, “We are particularly pleased that Geregu Power has joined the prestigious group of companies listed on our main board, which will differentiate it as a professionally run power company with high standards, having met NGX’s listing criteria.”
Mahmood added, “A main board listing is a sign of commitment to strong corporate governance, excellence, professionalism, efficiency in service delivery, and providing increased returns to shareholders. It is our expectation that the Geregu Power listing will encourage other power generation and distribution companies to list their shares on the exchange, thereby opening the sector up to cheaper, long-term capital that will boost infrastructural development and value creation.”
Otedola’s feat with Geregu is reminiscent of his acquisition of a 7.57 per cent equity stake in First Bank Holdings, the parent company of First Bank of Nigeria. The purchase formally consolidates his position as the biggest shareholder of FBN Holdings.
To underscore the positive reception of Otedola’s acquisition by the industry, FBN Holdings witnessed unusually massive trading in its shares, and the cumulative number of units traded within the period surpassed 2.1 billion.
EVERYONE’S FATHERHOOD GOALS
Femi Otedola is the practical definition of the cool dad. In a world that is fast questioning the parentings of millions, Otedola is a good example of a great dad whose bond with his children has made him a quintessential father. His paternal parenting template has consistently shown that one should not obsessively attempt to fit their wards into their own script just to suit their selfish interest. His unorthodox approach to parenting gives room for his kids to blossom in creativity without losing touch with their strong academic foundation.
Otedola does not belong to a group of fathers who want to live their dreams through their children. He would rather harness their potential and help them maximise it in their desired field. Otedola only ensures that the kids’ education is quality, broad and top-notch while their choices of vocations are theirs alone. Not even his ever-busy and peripatetic lifestyle as a businessman of global status have ever stood against his making quality time for his children. From Tolani to Florence (DJ Cuppy), Temi to Fewa (his only son), Otedola bears a fundamental obligation to do right by them and is actively involved in their lives, even if it entails sacrifices and difficulty.
Unlike many of the ilk who would rather force their kids to take after them or send their kids to top business schools around with a huge burden of expectation placed on them to take over their business empire, Otedola is not only supportive of his kid’s choices but also encourages them to excel at their chosen paths. So far, his three girls have chosen to play in the creative-cum-entertainment industry; and he has always supported them. Tolani featured in Kunle Afolayan’s ‘CITATION’ as the lead actress ‘Moremi’. Otedola was one of the first to post the trailer of the movie. His caption was, “Citation! My daughter, Temiloluwa, starring as Moremi Oluwa in ‘Citation’ (about sexual harassment) – Kunle Afolayan’s upcoming feature film. This movie is sure to be the best ever that has come out of Nigeria.”
During filming in Ife, Osun, Otedola visited the cast and crew to give moral support to his daughter. An unconfirmed report said he booked a whole hotel in the ancient city where Tolani was the only guest with her security guards and domestic aides. All through the month-long shooting, she was heavily guarded around the clock. A University College, London graduate of History of Arts, Temi is a fashion and travel blogger and owns JTO Fashion. Otedola has been seen having jolly moments with Tolani’s fiance, Mr Eazi, an Afrobeats star.
Recently, this hands-on, child-centric parent was a viral sensation when he was videoed in the kitchen helping his son, Fewa, with his cooking.
Tolani and DJ Cuppy enjoy the same relentless support from their dad. He is a major force behind their blooming careers in entertainment. Tolani, the dark-hued singer-songwriter, took the Nigerian music industry by storm in 2019 with her hit single, Ba Mi Lo, featuring Reekado Banks. When she released her newest single, Badman, the billionaire posted the teaser on his social media pages, saying, “My daughter, Tolani, beautifully sung and cleverly written latest single is out. Link in my bio.”
Tolani holds bachelor’s and master’s degrees in Psychology from the prestigious St. Andrews University, Scotland, the same university attended by Prince William, the Duke of Cambridge.
DJ Cuppy has immensely benefited from his father’s ‘coolness’, as she was the first to go into entertainment, starting as a deejay. Those who have seen the business and economics graduate of Kings College, London, at work say her strength lies in her clinical understanding of her crowd and ability to play the music that suits them at every point in time. One of the first things Otedola did when Cuppy decided to be a DJ was he had her intern at Roc Nation, the foremost American music label owned by billionaire rap royalty Jay Z.
Otedola is always keen to connect with his family. He never misses any of their milestones. Wherever in the world he is, he makes time to be with them, which was why a simple and spontaneous light-hearted father-daughter banter between him and Cuppy spun a social movement, an urban refrain and a song that became a mainstream hit. While on holiday in July 2019, Otedola and daughters stopped by in Italy for some Gelato, the video of which DJ Cuppy excitedly posted online and bang! it went viral, spinning countless rehashes, memes and skits by established stars and social media influencers and users.
Even his billionaire friends, like Aliko Dangote, Wale Tinubu, Herbert Wigwe and Donald Duke, all had their gelato video remakes. The virality of Gelato made DJ Cuppy later team up with rave-of-the-moment street hop star Zlatan, of the Zanku fame, on a new song fittingly titled ‘Gelato’.
In November 2020, Otedola stunned the world when he donated a whopping N5 billion to the DJ Cuppy Foundation and Save the Children’s Work Foundation, whose president is Princess Anne, the second child and only daughter of Queen Elizabeth II and Prince Philip, Duke of Edinburgh. At a gala to launch the foundation in aid of Save the Children’s Work in Abuja, with Vice President Yemi Osinbajo as the Special Guest of Honour, he donated what is now regarded as one of the largest individual donations to a philanthropic cause in Africa.
He had earlier shown them the depth of his love by gifting each of the girls a Ferrari in their colour of choice. The cars also came with bespoke number plates, which don’t come cheap in London.
MONUMENTAL PHILANTHROPY TRAILED BY HONOURS
Generosity finds more than ample space in Otedola’s heart. In his world, nothing trickles; everything pours, and they do in torrents. No wonder his place in philanthropy is indelibly assured, as the honours keep pouring in at home and abroad. In 2020, he was honoured with the coveted ‘Philanthropist of the Decade’ award by ThisDay newspaper as part of activities commemorating its 25th anniversary in January 2020. The influential newspaper’s board awarded 24 individuals and institutions for their contributions to the socio-economic and political growth of Nigeria.
Otedola was so honoured, according to the awards committee, “Given his recent hefty donations to public cause and lifting the needy, it is not surprising that former Chairman of FORTE Oil Plc, Mr Femi Otedola, is the people’s choice for philanthropist of the decade,” the paper stated. “His singular donation of N5 billion to assist children of the terror-ravaged North-East remains unexampled. Some prominent Nigerians such as Sadiq Daba, Victor Olaotan, both actors, and former Green Eagles captain, Christian Chukwu, were rescued from the jaws of death by his philanthropic intervention in their medical issues.”
Though now late, Daba and Olaotan’s families’ gratitude to Otedola would remain eternal for coming to their aid in their darkest hours. Late Majek Fashek also immensely benefited from his benevolence. Otedola spent a fortune rehabilitating him when he was stranded in London. He also paid former captain and coach of the Super Eagles Christian Chukwu’s N36 million medical bill, who had surgery at the Wellington Hospital, London; just as he rescued Peter Fregene, a former Green Eagles goalkeeper, who had been bedridden since 2001.
Highly detribalised without setting primordial boundaries, in 2019, he offered to assist ailing Nigerian lecturer, Inih Ebong, a former associate professor in the Department of Theatre Arts, University of Uyo, who was wrongly dismissed from his job in 2002 and despite several legal victories, has still not been reinstated.
At the outbreak of the coronavirus pandemic, Otedola was one of the billionaires who quickly rose to move the needle on rapid response efforts. He announced a donation of N1 billion towards eradicating the pandemic in Nigeria, stating, “I will be contributing N1 billion towards the eradication of COVID-19 across Nigeria. We must all do what we can to flatten the curve.”
He is not missing in the area of educational philanthropy. Otedola dazzled at the Augustine University’s Fundraising and Founders’ Day event held at the Muson Centre, Onikan, Lagos, in 2018 when he pledged to donate a well-equipped Faculty of Engineering building to the institution. The foundation for the building, worth N2 billion, was laid at a quiet ceremony on November 27, 2018.
Similarly, he has made several donations to the Michael Otedola University Scholarship Scheme, established in 1985 by his late father, Sir Michael Otedola, to give underprivileged students in Lagos access to higher education. Since its inception, the scheme has benefited more than 1,000 students. He once donated N100 million to the Otedola College of Primary Education in Noforija, Epe, Lagos. In 2008, he donated N80 million to the Faculty of Agriculture at the University of Port Harcourt.
Also, in 2019, he was named the biggest individual donor to the Lagos State Security Trust Fund (LSSTF). Subsequently, he and some other donors were celebrated at an event, ‘Transformational Security’ and Governor Babajide Sanwo-Olu, personally commended him for consistently intervening to improve the society. All of these have not gone unnoticed by a discerning world. He was honoured by the Silverbird Group as its Man of the Year 2019. Also, he won the 2019 African Philanthropist of the Year by respected African Leadership magazine, for his unequalled philanthropy and charitable contributions to society. At the African Leadership Persons of the Year Investiture Ceremonies and Awards gala night held in Johannesburg, South Africa, Otedola’s famous daughter, DJ Cuppy, received the award from the president of the African Development Bank, Dr Akinwunmi Adesina, on his behalf.
Otedola was also a winner in the Leadership in Business category of the 2018 Zik Prize in Leadership Awards, instituted in 1995 to award prizes to exceptional leaders in honour of Nnamdi Azikiwe, Nigeria’s first president. “The purpose of this award is to encourage and nurture leadership in the African continent and Diaspora,” Prof Pat Utomi, a member of the advisory board, said.
The list of beneficiaries of his large-heartedness is endless, and it does not appear he would be relenting till eternity.
