Geregu Power Plc Faces Questions Over N31billion Restricted Cash, Failed Power Plant Acquisition | Sahara Reporters

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

Geregu Power Plc’s N6billion bond repayment default has raised questions over the fate of N31billion in restricted cash reportedly held in an escrow account after the company failed to complete a planned power plant acquisition.

The development has brought renewed scrutiny to the utilisation of proceeds from the N40 billion Series One Senior Unsecured Bond issued by Geregu in July 2022 under its N100 billion multi-instrument issuance programme.

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

At the time of the issuance, Geregu stated that proceeds from the bond would 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”.

More specifically, Geregu disclosed in its 2022 financial statement that the net proceeds from the N40 billion bond would be used to finance the acquisition of a power generation company “which is currently in the final stage of bidding processes by the Bureau of Public Enterprises (BPE)”.

The proposed acquisition was believed to be connected to Geregu II, with the company’s 2023 financial records showing a contractual commitment of “$4,000,000.00 Bid Bond for acquisation of Geregu ii in favour of Bureau of Public Enterprises with validity period of May 23, 2024”.

However, the acquisition was not completed, creating questions about what happened to the funds that had been earmarked for the transaction.

The issue has become more significant following comments by Farouk Yusuf, a financial expert and auditor, who discussed Geregu’s financial position during an interview on Arise Television’s Morning Show.

Yusuf said his review of the company’s books showed that Geregu had N34 billion in outstanding bond liabilities and N31 billion in restricted cash.

“…We discover that yes, the bond payable is 34 billion and the restricted cash there is 31 billion,” he said.

According to Yusuf, the restricted cash was placed in an escrow account after the planned acquisition failed.

“This 31 billion, since it’s an interest-yielding account, it is where you will now go and liquidate a part when the liability of this 34 falls due,” he said.

The arrangement meant that the restricted funds could serve as a financial buffer for the company’s bond obligations when repayments became due.

However, according to Yusuf, when N6 billion became due, the new management discovered that the money was no longer available.

“Now 6 billion has fallen due as at 20 July, and the new management, as it were, had to go to where the backup call was, which is a restricted account, which is the escrow account, where this money was kept, and unfortunately, they were told that that money had been utilized.”

Yusuf further attributed the utilisation of the funds to the company’s previous management and owners.

“Utilized by who? Yes, utilized by the former management, former owners that handed over to them.”

The claims raise a critical question about the movement and utilisation of the bond proceeds after the intended acquisition failed.

Yusuf said the amount in default was N6 billion as of July 28, 2026, while the total bond payable stood at N34 billion as of December 2025.

The default occurred just eight months after Femi Otedola sold his majority stake in Geregu for N1.088 trillion in December 2025, with a new leadership led by Abdulaziz Yari as chairman subsequently taking over the company.

The timing of the default has increased scrutiny of the company’s financial position and the management of liabilities inherited by the new owners.

The development has also raised wider concerns about liquidity challenges confronting Nigeria’s power generation companies, which are reportedly owed about N6.5 trillion by the Federal Government.

For Geregu, however, the immediate concern remains the company’s N6 billion default and the reported disappearance or utilisation of the N31 billion restricted cash that had allegedly been maintained as a potential source for servicing the bond.

The questions are particularly significant because the original N40 billion borrowing was tied to a specific corporate strategy, including the acquisition of additional power assets.

Geregu Power, in a statement issued on August 1, said it was engaging relevant stakeholders, advisers and regulators to resolve the issues surrounding the bond default.

The development has consequently placed renewed attention on the company’s 2022 bond, the failed Geregu II acquisition, the reported N31billion escrow balance and the circumstances surrounding its subsequent utilisation.

In December 2025, it was reported that billionaire businessman Femi Otedola, sold his majority stake in Geregu Power Plc for N1.088 trillion in a deal financed by a consortium of banks led by Zenith Bank Plc.

Otedola’s Amperion Power Distribution Company Ltd held nearly 80 percent of the power-generating company.