Nigeria’s Power Generating Company, Geregu Power Plant, has successfully completed a N40 billion in unsecured corporate bonds at an interest rate of 14.5%.
The bond which opened on July 1, 2022 is part of the company’s N100 billion multi-instrument issuance programme meant to finance capital expansion and working capital requirements.
The bond is the largest corporate bond raised by a Power Company in Nigeria and it was oversubscribed, closing on July 14.
Proceed of the bond is to be used to augment funding for the planned acquisition of the 434MW Geregu Power Plant as well as to support its working capital requirements.
The Bond is the first installment of the N100 billion multi-instrument issuance programme which the company launched. The N40 billion bond issued is for a fixed term of 7 years and at an issue price of N1000 per unit. The minimum uptake was N10 million and then multiples of N1 million subsequently.
The bond closed at an interest rate of 14.5% and has a principal moratorium of 2 years. This means the principal will be paid after two years.
The Chief Executive Officer of Geregu Plc, Akin Akinfemiwa stated that the success of the bond confirms the confidence the debt market has in Nigeria’s power sector.
Rating Agency, GCR Ratings assigned an A rating meaning the bond is Stable. Augusto on the other hand assigned a Bbb+ rating to the bond also Stable.
Geregu Power PLC was incorporated in November 2006 as one of the unbundled companies from the now-defunct Power Holding Company of Nigeria (PHCN).
Femi Otedola is the Chairman of Geregu Power Plant while Akin Akinfemiwa is the Chief Executive Officer.
