Geregu Bond Predates Current Ownership, Says Lawyer

A lawyer, Fanan Akya, has said Geregu Power Plc’s N40.09 billion Series 1 Senior Unsecured Bond was issued before the company came under its present ownership. He cautioned against linking the historical debt to the current owners.

Akya, in a statement he issued yesterday in Gusau, said recent reports on the bond had created the misleading impression that the current owners of Geregu Power originated the borrowing and that reported difficulties in servicing it were evidence of financial distress under their watch.

He said the facts needed to be examined in their proper corporate and historical context, noting that the instrument was issued on July 28, 2022, under Geregu Power’s N100 billion debt issuance programme.

“The N40.09 billion Series 1 Senior Unsecured Bond referenced in the report did not originate under the current ownership,” Akya said.

The lawyer argued that a company is a separate legal entity from its shareholders and that where ownership changes, existing liabilities are normally considered as part of the transaction, subject to representations, warranties, indemnities and other agreements between the parties.

He therefore cautioned against describing the current owners as the people who borrowed the money simply because they later acquired the company.

“The current owners of Geregu Power should not be portrayed as though they were the originators of the N40.09 billion bond obligation,” he said.

Akya said the key issues in assessing the bond should include when it was issued, who controlled the company at the time, the purpose of the funds, the liabilities that existed at the point of ownership change, and whether incoming shareholders accepted personal responsibility for the debt.

He acknowledged that any reported failure to make scheduled payments was a matter investors and regulators should take seriously.

However, he said the payment position should not automatically be used to conclude that the current owners were responsible for the debt or that the company was in financial collapse.

“If the eighth coupon and fourth principal repayment were not made when due, that development could properly be reported, but the report should also explain the history of the bond and the circumstances under which it was issued,” he said.

“A bond payment status is one thing. Attributing the origin of the debt to the current owners is another. The two should not be conflated.”

On the company’s recent financial performance, Akya challenged the link being drawn between declining revenue and profit and the N61.47 billion major turbine maintenance programme.

He said major overhauls of power-generation equipment should not be interpreted as financial mismanagement, noting that such work often requires plants to shut down temporarily, reducing generation and revenue.

“Major maintenance of power-generation infrastructure is not, by itself, evidence of financial mismanagement,” he said.

According to him, the decline in Geregu Power’s revenue and profit in H1 2026 should be assessed alongside the operational circumstances of the turbine overhaul. He added that investors should focus on whether the maintenance would be completed successfully and whether generating capacity and cash flows would recover.

Akya also cited Geregu Power’s credit rating as a relevant factor. He said GCR Ratings had maintained the company’s national-scale long-term issuer rating at A(NG) with a Stable outlook, which he said was not consistent with claims of irreversible financial collapse.

He further questioned the isolated use of financial figures, including the reported 88 per cent fall in profit after tax and 78.71 per cent decline in revenue, saying they should be considered alongside other items such as a N16.12 billion reversal of financial asset impairment and a reduction in total liabilities to N239.33 billion.

On the share price, which fell from N1,141.50 at the start of the year to N825.70 on August 7, Akya said market performance could be driven by sentiment, liquidity, and broader market factors, and could not, by itself, establish responsibility for historical debt.

He warned that inaccurate reporting on a major generating company could affect investors, lenders, bondholders and the wider power sector.

“Financial journalism should not become a vehicle for creating panic among investors or attributing historical corporate decisions to people who were not responsible for making them,” he said.

Akya urged stakeholders to monitor the bond obligations, financial results and maintenance programme, but said these should not be used to alter the history of the company’s ownership or the origin of its debt.

“If a bond was issued before the current ownership arrangement, that fact should be prominently stated,” he said.

LEADERSHIP reports that Geregu Power Plc is one of Nigeria’s leading independent power producers listed on the Nigerian Exchange Limited.