Geregu: Concerns Mounts over Utilisation of N40bn Bond Issued Under Previous Management

Oluchi Chibuzor

The recent corporate debt default by Geregu Power Plc has raised concerns as to how the proceeds of the N40 billion series 1 senior unsecured bond was used.

The bond, issued on July 28, 2022, has a seven-year tenor and is scheduled to mature on July 28, 2029, according to details published by the FMDQ.

At the time, the ownership structure of the company indicated that Amperion Power Distribution Company Limited directly held 2,489,995,020 shares, controlling 99.99 percent of the organisation.

The former chairman of the company had a direct shareholding of 1,245 units (0.0001 per cent), as well as Olawunmi Christine Otedola, Akin Akinfemiwa, the firm’s Chief Executive Officer (CEO), and Calvados Global Services Limited.

However, former chairman’s indirect shareholding stood at 2489,995,020 shares, giving him 99.59 per cent control in the power generation company, according to listing records.

The N40 billion series one bond was issued under Geregu’s N100 billion multi-instrument issuance programme of which the proceeds was expected to be, “Applied by the issuer for its general corporate purposes including expansion of the company’s current power generation capacity and the strategic acquisition of power assets in Nigeria and other African countries.”

In its 2022 financial statement, Geregu said the net proceeds from the N40 billion corporate bond would be used to finance the acquisition of one of the power generation companies “which is currently in the final stage of bidding processes by the Bureau of Public Enterprises (BPE).”

A review of its 2023 financial records showed that the organisation made a contractual commitment of “$4,000,000.00 Bid Bond for acquisition of Geregu II in favour of Bureau of Public Enterprises with validity period of May 23, 2024”.

But sources in the company said the acquisition objective was not achieved, raising questions on the deployment of 2022 bond proceeds.

Geregu insiders are also worried that the some of the bond proceeds may have been diverted to other purposes or misappropriated by the previous management.

According to a source, public reporting does not show a confirmed final award of Geregu II to Geregu Power Plc.

“If the acquisition did not close, what happened to the earmarked proceeds is a legitimate, documentable question. If the bond’s stated purpose wasn’t fulfilled, where did the funds go? Logically, they should either have been preserved to earn interest or redirected to strengthen the business. Evidence has emerged suggesting neither happened,” the source said.

The bond default, described as the first in seven years, came just eight months after the former chairman sold his majority stake in Geregu for N1.088 trillion in December 2025, ushering in a  new leadership led by Abdulaziz Yari as the company’s chairman.

Although the overall bond value issued in 2022 was N40 billion, the Geregu default on “in the 8th coupon payment and 4th bullet principal repayment,” the FMDQ listing details said.

This, analysts said, means interest has been paid for seven times, while the principal has been paid for three times since the bond was issued.

Providing insight on the matter in an interview on Arise Television’s Morning Show, a Financial Expert and Auditor, Farouk Yusuf, said the amount in default is 6 billion as at July 28, 2026.

He disclosed that as at December last year, the bond payable was N34 billion naira, of which the N6 billion which has fallen due is part of.