Africa Capital Alliance’s (ACA) flagship private equity fund, CAPE IV, has completed a full exit from Aradel Holdings Plc, in what is the largest secondary sale of shares in the Nigerian energy sector.
The divestment delivered over 3oo per cent return in Dollar terms, equivalent to 1,700 per cent in Naira, after nearly a decade of investment in the indigenous upstream oil company.
ACA sold its 15.93 per cent stake, representing 691.96 million shares, for N387.2 billion at a market price of N559.50 per share on September 25. The transaction marks the end of a long-standing relationship between the fund and the energy firm.
A significant portion of the shares was acquired by Petrolin Ocean, which has now strengthened its position in Aradel. Petrolin, which previously held 8.11 per cent, purchased an additional 173.79 million shares valued at N96.4 billion. Thus, it boosted its stake to 12.11 percent, making it the company’s largest shareholder.
Business Post reports that in 2018, ACA converted a debt investment of N23 billion in Aradel to equity. As a result of this transaction, 36 million shares were allocate to ACA at $2.23. At the time, Aradel was valued at N145 billion, to which ACA had around 19 per cent stake.
Last year, Aradel exited NASD OTC Securities Exchange and listed on the Nigerian Exchange, listing 4.3 billion units at N702.69 billion, which amounted to a market of N3 trillion translating to a N574 billion share for ACA.
Shortly after the listing, ACA trimmed its holding by 24.7 million (0.57 per cent) in a N19.8 billion sale to boost liquidity in the market, reducing its stake to 15.93 per cent.
With this latest divestment, ACA has fully exited its position, realising N406.95 billion in total proceeds ($272 million).
The deal also shows Petrolin effort at boosting its foot print. The firm, a long-standing partner in the Aradel story and a member of the Renaissance Africa Energy consortium, tincreased stake deepens its influence in the company’s future direction.
The transaction highlights the robust value generated in Nigeria’s upstream sector. It also signals shifting shareholder dynamics that may shape Aradel’s next growth phase, which many analysts feel haven’t been utilised post-listing on the Nigerian bourse.