Geregu Power Plc has reportedly paid the N6 billion owed to investors under its N40.09 billion Series 1 senior unsecured bond, weeks after the power generation company defaulted on a scheduled coupon and principal repayment.
Sources familiar with the development said the payment was made on Wednesday, August 19, although TheCable could not independently verify the transaction. The reported repayment comes after growing concerns over Geregu Power’s obligations under the bond, which was issued to support the company’s funding needs and planned expansion projects.
The N40.09 billion bond was issued on July 28, 2022, under Geregu Power’s N100 billion multi-instrument issuance programme. According to FMDQ Securities Exchange, the bond carries a 14.5 percent coupon and is scheduled to mature on July 28, 2029. The company had earlier defaulted on its eighth coupon payment and fourth bullet principal repayment.
In response to the repayment concerns, Geregu said on August 13 that its board and management were reviewing the company’s financial obligations and engaging relevant stakeholders and advisers to resolve the situation. The company said the review covers its transactions, liabilities, operational commitments, financing arrangements and related corporate documentation, with the aim of ensuring transparency, accuracy and prudent financial management.
The bond default also affected Geregu Power’s credit standing, with Agusto & Co. withdrawing the company’s ‘A-’ credit rating. The rating agency said it was unable to obtain sufficient reliable information to maintain an opinion on Geregu Power’s creditworthiness. The reported N6 billion repayment could ease some of the immediate concerns surrounding the company’s bond obligations, although investors will likely continue to watch its financial position and future debt-servicing commitments closely.
source: The cable
