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.
Recent corporate debt default by Geregu Power Plc has raised concerns over the utilization of the N40 billion series 1 senior unsecured bond issued in July 2022. The bond, with a seven-year tenor and due on July 28, 2029, was expected to be used for general corporate purposes, expansion of power generation capacity, and strategic acquisitions in Nigeria and other African countries. However, former chairman's indirect shareholding gave him 99.59 percent control of the company.
In its 2022 financial statement, Geregu claimed the bond proceeds would fund the acquisition of a power generation company in final bidding stages by the Bureau of Public Enterprises (BPE). Yet, Geregu insiders indicate that the acquisition objective was not met, prompting questions about the deployment of the bond proceeds. There are allegations that some funds may have been diverted or misappropriated by the previous management, as public reporting does not confirm the final award of Geregu II to the company.
The default on the bond's 8th coupon payment and 4th bullet principal repayment, described as the first in seven years, has come eight months after the former chairman sold his majority stake in Geregu for N1.088 trillion in December 2025. Analysts note that the bond's stated purpose has not been fulfilled, and the funds are either unaccounted for or should have been preserved to earn interest or used to strengthen the business.
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