By Augustine Aminu
Nigeria’s Power Generating Company, Geregu power Plant, has successfully raised N40 billion in unsecured corporate bonds largest in Power Sector at an interest rate of 14.5%.
This is part of the company’s N100 billion multi-instrument issuance programme which intends to finance capital expansion and working capital requirements.
The bond opened on July 1 2022 and closed on the 14th of July and was reportedly oversubscribed, the largest corporate bond raised by a Power Company in Nigeria.
According to information available to media, Proceed of the bond is to be utilized 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 bond will be serviced semi-annually.
Utilization of the bond is the partial financing of the acquisition of the Geregu II Power Plant.
The bond will be repaid from the cash flow of the company.
Lead Issuing houses for the bond include United Capital, Cordos Capital, Coronation Bank, Commercial Partners, FBN Quest, Kairos, and Lighthouse.
