Geregu Power defaults on N40.09bn bond as earnings crash 88%

Geregu Power Plc has defaulted on its N40.09 billion Series 1 Senior Unsecured Bond, missing both its eighth semi-annual coupon payment and its scheduled fourth principal bullet repayment. FMDQ Securities Exchange published the updated listing status, flagging a “credit default in the 8th coupon payment and 4th bullet principal repayment.”

The missed payments come midway through the bond’s life. The 7-year bond was issued on July 28, 2022, at a fixed rate of 14.50% under the company’s N100 billion debt issuance programme, with semi-annual coupons and amortising principal repayments running to July 28, 2029.

Revenue and profit collapse

For the six months ended June 30, 2026, Geregu Power’s profit after tax dropped 88% to N2.54 billion from N20.27 billion in the same period of 2025. Net profit margin contracted sharply to 13.34% from 23.23% a year earlier. Revenue fell 78.71% to N18.65 billion from N87.63 billion in H1 2025.

The second quarter was worse. The company generated just N419.1 million in turnover, compared with N55.87 billion in Q2 2025, a near-total collapse in quarterly sales.

That performance is far below the company’s own guidance. Earlier in the year, Geregu had forecast Q1 2026 revenue of N57.11 billion, above the N31.75 billion recorded in Q1 2025, and projected PAT of N12.02 billion, also above the prior year’s N10.43 billion.

Turbine maintenance blamed

Geregu Power attributed the slowdown to a planned N61.47 billion major turbine maintenance programme. The overhauls are meant to secure long-term plant integrity, but the temporary loss of billable capacity and energy output has hit near-term margins and cash generation.

The company pointed to some balance sheet resilience. Financial asset impairment reversals of N16.12 billion provided a partial cushion. Total liabilities declined to N239.33 billion during the period, even as debt servicing capacity came under visible strain.

GCR Ratings affirmed Geregu Power’s national scale long-term issuer rating at ‘A(NG)’ with a Stable outlook, citing expectations of a recovery once turbine overhauls are completed and full capacity returns to the national grid.

Market reaction and what it means

The share price has fallen 27.67% since the start of the year, closing at N825.70 on Friday, August 7, down from N1,141.50 at the beginning of the year.

Geregu Power acquired generating plants in Ajaokuta in 2013 and listed on the Nigerian Exchange four years ago. The bond default, alongside an 88% earnings collapse and near-total wipeout of Q2 revenue, raises questions about whether the turbine maintenance programme was adequately funded or hedged.

For bondholders and equity investors, the market is still pricing the gap between Geregu’s near-term distress and its longer-term recovery outlook. The next test is whether the company cures the default within any grace period and gives a clearer timeline for full capacity restoration.