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When crude collapsed from about $147 a barrel and the Nigerian stock market crashed in 2008–2009, his inventory and equity fell in value while the loans stayed fixed, leaving him with debts reportedly in the hundreds of billions of naira. He spent years selling assets and repaying lenders instead of defaulting, and later re-emerged as chairman of Forte Oil and a controlling investor in Geregu Power.
A distributor who borrows to hold inventory or equity is making a price bet, whether he calls it one or not. The debt is fixed in nominal terms while the collateral moves with the market, so a price shock alone can wipe out equity with no operational failure. When the inventory and the securities are exposed to the same underlying commodity, the risks compound instead of diversifying.
An insolvent borrower who negotiates with creditors and repays them, even slowly and by selling prized assets, keeps his standing with banks and counterparties. That standing is the scarce asset for a second act, because future deals depend on lenders being willing to finance him again. Walking away saves money in the short run but spends the reputation that makes a comeback possible.
Rapid growth in volume, market share, and visible wealth can hide a fragile balance sheet built on short-term borrowing. Asking what one bad quarter in prices would do to the business shows its real strength more reliably than revenue or public status. From this angle, being debt-free is a more meaningful achievement than being among the richest.