Yari Blames Otedola, Akinfemiwa for Geregu N40bn Bond Default, Assures Investors

*Demands ‘fair treatment or reimbursement of funds’  

*Lawyer: Escrow fund meant for repayment allegedly utilised before ownership changeInsists they left disappointing legacy

Demands ‘fair treatment or reimbursement of funds’  Lawyer: Escrow fund meant for repayment allegedly utilised before ownership change Insists they left disappointing legacy

Emmanuel Addeh in Abuja and Sunday Ehigiator in Lagos

The Chairman of the Board of Directors of Geregu Power Plc, Senator Abdulaziz Yari, has attributed the company’s N40 billion bond default to its former majority owner and Chairman, Femi Otedola, and former Chief Executive Officer, Akin Akinfemiwa, while assuring investors that the outstanding issues were being addressed.
This comes as a corporate lawyer and Managing Partner at Segun Suleiman & Co., Faruk Yusuf, who spoke during an interview on ARISE News Channel, alleged that the former owners of Geregu Power, Amperion Power, misled the company’s new owners, MA’AM Energy Limited, over funds meant to secure its bond obligations, claiming that the money was held in an escrow account when it had allegedly already been utilised.

The allegations had heightened concerns over Geregu’s ability to meet its obligations to bond investors following the company’s default on a N40 billion bond obligation, putting its financial position and corporate governance under increased scrutiny.
On December 29, 2025, Otedola, the majority shareholder, sold his interest in Geregu Power to MA’AM Energy Limited for about $750 million, resulting in a change in its controlling ownership and a new board led by Yari.
But Yari, yesterday, said although the bond in question was issued and the underlying arrangements made under the tenure of the former owners and management, he decided to personally intervene to provide funds required to settle the immediate outstanding obligation.

THISDAY learnt that the intervention was in the sum of N6 billion.
In a statement he personally signed, Yari stressed that the move should not be interpreted as an admission of personal liability or an indication that the current board or management was responsible for the problem.
“I have also been in ongoing discussions with the former owners and management of the company, under whose tenure the bond in question was issued and the underlying arrangements were made. I am encouraged to report that they have indicated their willingness to continue engaging toward a lasting and amicable solution,” he stated.

“This intervention addresses the immediate concern facing bondholders. It does not close the underlying matter, and it does not absolve the former owners of a disappointing legacy,” the former Zamfara State governor noted.
Yari admitted that the situation had generated legitimate concerns among bondholders, shareholders and the wider market, noting that Geregu’s reputation for reliability and sound governance made it imperative to address the matter decisively.

According to him, his decision to personally provide the funds was driven by the need to protect the company’s reputation and restore confidence among investors, rather than an acceptance of responsibility for the obligation.

“I want to be precise about what this means and what it does not mean. This is not an admission that the obligation is personally mine, nor is it a judgment that the current board or management created this problem. It is a decision made in the interest of the institution I am privileged to chair,” he added.

He pointed out that he had been closely engaged with the board, management, financial and legal advisers and other relevant parties since the matter emerged, in an effort to establish how the obligation arose and determine the appropriate path towards its resolution.

According to him, the immediate funding would protect bondholders from further uncertainty while discussions continued with the former owners and management on the underlying liability.
He stated that the former owners and management had committed to working in good faith towards a full and fair accounting of how the obligation arose and how it should be treated and resolved between the parties.

“Our objective, ultimately, is a final, mutually acceptable resolution: fair treatment or reimbursement of the funds I am advancing now to protect the company, and clear, dependable arrangements for the company’s future obligations to bondholders,” Yari said.
He expressed confidence that the ongoing engagement would produce an acceptable resolution, stressing that the priority was to prevent the dispute from undermining the company’s operations or the confidence of investors and other stakeholders.

Yari also sought to draw a distinction between the board’s oversight responsibilities and the day-to-day management of the company, noting that he was not involved in the daily running of Geregu Power.
He assured bondholders and shareholders that the company remained committed to meeting its obligations and maintaining sound governance.

“To our bondholders, our shareholders, and everyone who has built something lasting with Geregu Power: this company’s obligations will be honoured, its governance will remain sound, and its future is not in question,” he said.

Agusto & Co recently withdrew the ‘A’ credit rating it had assigned to Geregu Power and its N40.09 billion Series 1 Senior Unsecured bond following the power generation company’s recent default on the eighth coupon payment and fourth principal repayment.
The rating agency had said the withdrawal was prompted by both the default and its conclusion that it no longer had “sufficient reliable information” to maintain a credit rating opinion on the company and its bond.

Meanwhile, a corporate lawyer and Managing Partner at Segun Suleiman & Co., Faruk Yusuf, has alleged that former owner of Geregu Power misled the company’s new owners, MA’AM Energy Limited, over funds meant to secure its bond obligations.
Yusuf, while explaining the circumstances surrounding the default, said the entire N40.9 billion bond should not be confused with the amount that actually fell due for payment.

According to him, only about N6.026 billion was due as of July 28, 2026, while N40.9 billion represented the total value of the bond.
“This bond was taken in July 2022 and they had the repayments ever since on both the principal and the coupon. The coupon here, for those of us who are not accountants or auditors, is the interest rate. The interest rate has been paid seven times. The principal had been paid three times,” he said.

He explained that the bond had an initial moratorium period before repayment commenced, while ownership of Geregu Power changed in December 2025.
Yusuf said the bond was originally raised in 2022 to finance the acquisition of another power plant and was not intended to serve as working capital for Geregu Power.
“That bond was not taken as working capital. It was not taken to enhance Geregu Power Plant working capital in 2022. It was taken to acquire another power plant. And that failed. They couldn’t meet up with the BPE requirement, Bureau of Public Enterprise,” he explained.

He said following the failure of the proposed acquisition, the funds were expected to remain in an escrow or restricted account, where they could generate interest and subsequently be used to meet the bond obligations as they fell due.
According to Yusuf, the company’s records showed a bond payable of about N34 billion and restricted cash of about N31 billion.
“We went behind to carry out a review of their books and discovered that, yes, that money was kept in an escrow account, which is right, generating interest because since their business was unable to go on, that is, the acquisition of that power plant that the bond was taken for, couldn’t happen,” he said.

Yusuf said the restricted cash was expected to provide the funds needed to meet the bond obligations when they became due.
However, he alleged that when the new owners attempted to access the funds after the July 28 payment became due, they were informed that the money was no longer available.
“And unfortunately, they were told that that money had been utilised. Utilised by who? Yes, utilised by the former owners that handed over to them,” Yusuf alleged.

The lawyer further claimed that documents exchanged during the ownership transition had indicated that the funds were still intact.
“Part of that asset handed over to the new owners where correspondence were exchanged, that N31 billion that is in an escrow account confirmed to us its existence.
“And it was confirmed that it is there. And it is from there that liquidation should take place to take care of liabilities when they fall due.”

He said the discovery had left the new management with the challenge of sourcing alternative funds to meet the bond obligation and reassure investors.
“They have to go into another avenue of sourcing for funds to be able to meet up with their obligations as they fall due, to be able to assure and restore confidence of the bondholders,” he said.
The allegation has raised questions about the due diligence conducted during the December 2025 ownership transition and the representations made to the new owners regarding the company’s assets and liabilities.

Yusuf acknowledged that due diligence during mergers and acquisitions could not always uncover every issue, but said the circumstances surrounding the restricted cash had become a major concern.
“There can never be 100 per cent due diligence when there is a merger or acquisition. It is when you have taken over that certain things will begin to reveal themselves,” he said.

The development has also raised questions about corporate governance and whether the circumstances surrounding the alleged utilisation of the escrow funds warrant further investigation by regulatory and law-enforcement authorities.
Asked whether institutions such as the Economic and Financial Crimes Commission (EFCC), Securities and Exchange Commission (SEC) and Central Bank of Nigeria (CBN) could become involved, Yusuf said regulators were already aware of the matter.

“The regulatory process is already ongoing and that is why the new owners have not been able to come up with full details of what is behind the scenes. The regulators are aware. The processes are already ongoing with the regulators,” he added.