When Silence is Deafening
THREE months after a disappointing turn of events for the investors who staked their money in the bond issued by Geregu Power Plc in July 2022, the Nigerian Securities and Exchange Commission (SEC) is yet to issue not even to acknowledge this major infraction not to talk of reassuring investors.
Senator Abdulaziz Yari, a former governor, senator and current director General, who is now the chairman of Geregu, and its major investor has coughed out the N6 billion (about $4.5 million) due payment somehow.
But anxiety still persists.
What happens in January 2027 when another payment is due?
“At least a word from SEC would have given us an indication of what is going on and what to expect going forward”, said a fund manager who pleaded anonymity.
Geregu still has over 45 billion naira in principal and coupon to pay over 5 years, till 2031. The company’s recent performance has not been stellar with revenue dipping by almost 80% from N88 billion in the first of 2025 to N18 billion in the same period in 2026.
Geregu attributed the performance dip to an upgrade carried out on a major infrastructure but how comfortable investors would be with that narrative is not clear, especially against the background of the general crisis in the Nigerian power sector.
Yari has reached out to Femi Otedola, a Forbes rated billionaire and serial investor, who was the majority investor when the bond was issued. Whatever settlement arose from the meeting, which was held in France, is not yet known but will Yari continue to dip his hands into his pocket every six months when a new payment is due?
“The obligation of due diligence for every investment, in actual fact, is with the investor. But a bond is not an equity. It carries a promise that when broken should attract serious regulatory interventions. And the market should know about it. Otherwise, the environment becomes a battleground of disorder”, Wale Animaseun, the managing director of First Funds, a management consulting firm, said.
Animashaun further noted that the Geregu bond default may not just be an internal issue and may “be symptomatic of the larger crisis in the power sector where infrastructure challenges across the generation, distribution and transmission platforms are affecting revenue and cashflows of companies”.
This may be a cause for concern for power companies most of whom need significant capital to deliver across the entire value chain segments. According to the Nigerian government, over $100 billion is required to turn around its ailing power sector over the next ten years, an amount equivalent to about 2.5% of its GDP each year.
According to data from FMDQ in its June 2026 market report, over N2.3 trillion are outstanding obligations in the Nigerian bond market. Government bonds are safer than corporates and so carry less return. But for investors, the Geregu saga may represent an ominous sign. Mr Otedola has floated across three to four big listed companies in the last few years, exiting at every point in time to search for a greener pasture.
Is SEC talking to him on the Geregu matter or letting this slide? This episode is perhaps one of those periods when silence is not golden.
