Geregu Power Plc’s failure to meet a N6.03 billion ($4.4 million) bond payment has opened questions over the power company’s reported cash position and the use of money raised for an acquisition that was never publicly confirmed as completed.
Geregu Power reported ₦31.77 billion in short-term deposits at the end of 2025, months before it missed a ₦6.03 billion bond payment.
- Geregu Power failed to meet a N6.03 billion ($4.4 million) bond obligation that fell due in July.
- The company reported N31.77 billion ($23.4 million) in short-term deposits at the end of 2025.
- The bond-funded acquisition was initiated under Geregu’s former owners but was not completed before control changed in 2025.
- Agusto & Co has withdrawn Geregu’s rating, saying it cannot rely on the company’s accounts until an independent forensic review is completed.
The Nigerian power producer reported N31.77 billion ($23.4 million) in short-term deposits at the end of December 2025, according to its audited accounts.
Its latest interim accounts also reported N65.59 billion ($48.3 million) in cash and cash equivalents as of 30 June 2026, one month before the bond payment became due.
The figures have created an apparent contradiction between Geregu’s published liquidity position and its failure to meet a considerably smaller debt obligation on 28 July.
The discrepancy has become more significant after Agusto & Co withdrew the A- rating assigned to Geregu and its N40.09 billion ($29.5 million) bond.
The Nigerian rating agency said the decision followed the default and its conclusion that it no longer had sufficient reliable information to maintain an opinion on Geregu’s creditworthiness.
“Management has advised that previously issued financial statements are undergoing an independent verification process,” Agusto said.
“Pending completion of this review, Agusto & Co is unable to rely on the current audited financial statements and, therefore, cannot provide an opinion regarding the Company’s creditworthiness.”
The agency said it would reassess Geregu after the independent forensic review and the receipt of reliable financial statements for the year ended 31 December 2025.
What Geregu actually defaulted on
The default does not cover the entire N40.09 billion bond, as some initial reports suggested.
Geregu issued the seven-year senior unsecured bond on 28 July 2022 at a fixed coupon rate of 14.5%. The bond is scheduled to mature in July 2029.
FMDQ Securities Exchange classified the instrument as being in credit default after Geregu missed its eighth coupon payment and fourth scheduled principal repayment.
Farouk Yusuf, managing partner at accounting firm Segun Sulaiman & Co, told Arise News that previous interest and principal payments had been made.
He calculated the obligation outstanding as of 28 July at N6.026 billion, rather than the bond’s full original value.
The default came seven months after control of Geregu changed hands.
In December 2025, MA’AM Energy Limited acquired a 95% interest in Amperion Power Distribution Company, Geregu’s majority shareholder. The transaction transferred ultimate control of about 77% of Geregu from entities linked to billionaire Femi Otedola.
The transaction did not involve a direct sale of Geregu shares on the Nigerian Exchange.
The unanswered question over Geregu’s deposits
Geregu’s audited 2025 accounts reported N31.85 billion in cash and cash equivalents, almost all of which was recorded as a N31.77 billion short-term deposit.
The accounts also reported total bond obligations of approximately N34.15 billion at the end of the year.
Yusuf claimed that the deposit was held in a restricted, interest-earning account that was expected to support future bond repayments.
According to him, the new management attempted to access the funds after the July payment fell due but was allegedly informed that the money had already been used.
He attributed the alleged utilisation to the company’s former management.
However, the publicly available 2025 accounts describe the N31.77 billion as a short-term deposit. They do not clearly identify the full amount as restricted cash or state that it was held exclusively for bondholders.
No documentary evidence has been made public showing when the deposit was withdrawn, how it was used or who authorised any transaction involving it.
The allegation that the money was diverted or misappropriated has also not been independently established.
The forensic review may therefore need to determine whether the reported deposits existed, which institutions held them, whether they were subject to withdrawal restrictions and what happened to them during the ownership transition.
Agusto & Co withdrew Geregu Power’s rating after saying it could no longer rely on the company’s accounts pending an independent forensic review..[Agusto-Co]
An acquisition that did not materialise
Questions about Geregu’s cash position are tied to the original purpose of the bond which was initiated by Geregu’s previous shareholders led by Femi Otedola.
The company said in its 2022 audited accounts that the proceeds would finance the acquisition of a power generation company that was then in the final stage of a Bureau of Public Enterprises bidding process.
Its 2023 accounts later disclosed a $4 million bid bond in favour of the BPE for the proposed acquisition of Geregu II, with a validity period ending in May 2024.
Geregu II is a 434-megawatt gas-fired power plant in Kogi State and was among the National Integrated Power Projects considered for privatisation.
There is no public confirmation that Geregu completed the acquisition under the previous shareholders, before selling off the company to the new majority shareholders.
This leaves questions about whether the bond proceeds remained invested after the bid failed, were redirected to other corporate activities or were used for projects covered by the wider terms of the issuance.
The offer documents allowed the company to apply the proceeds to general corporate purposes, including expanding its generation capacity and acquiring power assets in Nigeria and elsewhere in Africa. But Geregu’s subsequent accounts gave the proposed BPE acquisition as the specific use of the net proceeds.
