Nigerian politician Abdulaziz Yari sits on $400 million paper gain at Geregu despite sharp share price slide

Abdulaziz Yari, the Nigerian senator who paid $750 million for control of Geregu Power in December, is sitting on a paper gain of roughly $400 million on the stake, even after the electricity generator's shares fell about 28 percent on a collapse in quarterly earnings.

The apparent contradiction comes down to how he bought in. Yari acquired an indirect controlling interest of about 1.925 billion shares, equal to 77 percent of Geregu's issued capital, by purchasing a 95 percent stake in Amperion Power Distribution Company, Geregu's majority shareholder, from Femi Otedola's First HoldCo. Because he bought a holding company at a negotiated price rather than shares on the open market, his effective entry cost sat well below the traded screen price.

At Geregu's current price of ₦825.70 on the Nigerian Exchange, that block is worth about ₦1.59 trillion ($1.15 billion). Yari paid $750 million. The stake has lost close to a third of its quoted market value since he took over, yet it remains worth substantially more than he paid for it.

How both things are true at once

The gap between the two figures is the discount embedded in the deal. Had Yari bought 1.925 billion Geregu shares at the December market price of ₦1,141.50, they would have cost around ₦2.2 trillion ($1.43 billion at December's exchange rate), well above the $750 million he actually paid. Control of a listed company acquired through a holding-company structure is priced on negotiated terms, not the daily quote, and the buyer typically pays a figure reflecting the target's book value, earnings and debt rather than its market capitalisation.

That cushion is why the share-price decline, painful on paper, has not pushed him into a loss against cost. The shares would need to fall a great deal further before his position turned negative. In mark-to-market terms he has watched the value of the holding drop by hundreds of millions of dollars since December. In cash terms against what he paid, he is comfortably ahead.

The earnings collapse behind the slide

The share price fell because Geregu's numbers deteriorated sharply after the handover. First-quarter profit after tax dropped to ₦2.10 billion ($1.5 million) from ₦10.43 billion ($7 million) a year earlier, and revenue fell to ₦18.24 billion ($13.2 million) from ₦31.76 billion ($21.3 million), a decline of about 43 percent. The company attributed the weakness partly to transitional challenges as Ma'am Energy integrated Geregu into its broader energy portfolio.

The reversal was jarring against 2025, when Geregu posted record full-year revenue of ₦184.9 billion ($120.5 million), up nearly 35 percent, with energy sales of ₦120.8 billion ($78.7 million) and capacity charges of ₦64.1 billion ($41.8 million). The stock, long treated as one of the exchange's steadiest large caps, shed 10 percent in a single July week and ended the first half among the market's weaker performers even as the NGX All-Share Index returned close to 46 percent.

Not every line moved the wrong way. Total equity rose to ₦60.73 billion ($44 million) at the end of March from ₦58.63 billion ($42.5 million) in December, and the company cut total liabilities to ₦239.33 billion ($173.4 million) from ₦246.38 billion ($178.5 million), trimming bond payables and borrowings. The balance sheet strengthened even as earnings fell, a divergence that reflects deleveraging rather than trading performance.

A recovery already forecast

Geregu has guided to a rebound. It projects profit after tax of about ₦8.17 billion ($5.9 million) for the second quarter ending June 30, on revenue of ₦44.34 billion ($32.1 million), a sharp recovery from the first quarter and a figure translating to earnings per share of ₦3.27. The forecast mirrors the company's Q2 2025 guidance of ₦8.6 billion, which it went on to beat with actual profit of ₦9.74 billion, and management has a record of outperforming its own projections.

The company also maintained its dividend, recommending ₦9 a share for the 2025 financial year, a total payout of about ₦22.5 billion ($16.3 million), giving Yari an income stream on the position regardless of the share price. On the forecast, cash and equivalents were expected to rise to ₦49.62 billion ($36 million) by the end of June.

The most illiquid blue chip on the exchange

Geregu carries an unusual trait for a company of its size. With 77 percent of its shares now locked in Yari's controlling block and much of the remainder held by long-term investors, its free float is thin, making it arguably the most illiquid large-cap stock on the Nigerian Exchange.

That illiquidity cuts both ways. On the downside, modest selling produces outsized price moves, which helps explain how a single quarter's disappointing results translated into a slide of nearly a third. On the upside, the same scarcity means the price can recover just as sharply on limited buying, and a controlling shareholder with a long horizon faces little pressure to sell into weakness. The paper loss in market value becomes real only on a sale Yari has no need to make.

A structural drag on the whole sector

Geregu's difficulties are not unique to the company. It was carrying about ₦200 billion ($144.9 million) in trade receivables at the end of the first quarter, money owed for power already delivered to the grid but not yet remitted through Nigeria's electricity value chain.

When distribution companies fail to collect tariffs efficiently, the shortfall flows back to generating companies, which absorb it regardless of how much power they produce. Geregu can run its plants at capacity and still see its cash squeezed if payment never arrives, a liquidity trap that erodes value independent of operational performance. It is a weakness running through the entire Nigerian power sector, where chronic under-collection, tariff shortfalls and grid instability have frustrated successive reform efforts and left generating companies exposed to a payment system that does not reliably pay them.

For Yari, that is the real question hanging over the investment. He bought at a price that keeps him ahead for now, and the company is forecasting a recovery. Whether the stake builds on its paper gain or gives it back depends less on the megawatts Geregu generates than on whether Nigeria's power sector can finally collect and remit the revenue those megawatts are supposed to earn.