Geregu Power Plc is facing renewed investor scrutiny after a sharp decline in earnings and revenue coincided with a default on its N40.09 billion Series 1 Senior Unsecured Bond.
The seven-year bond, issued on July 28, 2022, at a fixed interest rate of 14.50% under the company’s N100 billion debt issuance programme, is structured around semi-annual coupon payments and scheduled principal repayments, with maturity set for July 28, 2029.
According to an updated listing status published by FMDQ Securities Exchange, Geregu missed both its eighth semi-annual coupon obligation and its fourth bullet principal repayment.
FMDQ described the status of the bond as “credit default in the 8th coupon payment and 4th bullet principal repayment.”
The development is significant because the default has occurred midway through the bond’s tenure, rather than at maturity, raising concerns about the company’s immediate liquidity and debt-servicing capacity.
Earnings slump deepens pressure
The default comes as Geregu Power’s operating performance has deteriorated sharply.
For the six months ended June 30, 2026, the company’s profit after tax fell 88% to N2.54 billion from N20.27 billion in the corresponding period of 2025.
Revenue also declined by 78.71% to N18.65 billion from N87.63 billion, while net profit margin contracted to 13.34% from 23.23%.
The second-quarter figures were even more severe. Geregu generated only N419.1 million in turnover during Q2 2026, compared with N55.87 billion in the same period of 2025, representing a near-total collapse in quarterly sales.
The performance is a sharp reversal from the company’s earlier expectations. Geregu had projected Q1 2026 revenue of N57.11 billion and profit after tax of N12.02 billion, compared with N31.75 billion and N10.43 billion respectively in Q1 2025.
N61.47bn turbine maintenance weighs on cash flow
Geregu has attributed the sharp operational slowdown to its N61.47 billion major turbine maintenance programme.
The extensive overhaul is aimed at improving the long-term reliability and capacity availability of the company’s generating assets. However, the temporary reduction in available generation capacity has also limited electricity output and billable revenue, putting pressure on margins and operating cash flows.
That cash-flow squeeze appears to have contributed to the company’s difficulty in meeting its latest bond obligations.
The company, however, retains some balance-sheet support. Financial asset impairment reversals amounted to N16.12 billion during the period, while total liabilities declined to N239.33 billion.
GCR maintains stable outlook
Despite the financial strain, GCR Ratings affirmed Geregu Power’s national scale long-term issuer rating at ‘A(NG)’ with a Stable outlook.
The rating agency expects the company’s generation and revenue to recover once the turbine maintenance programme is completed and full available capacity returns to the national grid.
The assessment highlights the difference between Geregu’s long-term business prospects and its immediate liquidity position. While the company may retain strong recovery potential, the bond default shows that it is currently under significant cash-flow and debt-servicing pressure.
The market has also reflected some of these concerns. Geregu’s share price has fallen 27.67% year-to-date, closing at N825.70 on August 7, compared with N1,141.50 at the beginning of the year.
What investors are watching
Geregu Power acquired generating plants in Ajaokuta in 2013 and has since become one of Nigeria’s notable power generation companies. It listed on the Nigerian Exchange four years ago, attracting investors seeking exposure to the country’s power sector and its long-term demand potential.
The current bond default, coming alongside an 88% collapse in first-half profit and a near-total wipeout of second-quarter revenue, has nevertheless raised questions about the financial planning around the turbine maintenance programme and its impact on liquidity.
Bondholders will now be watching whether Geregu cures the default within any applicable grace period and provides clarity on the repayment of the outstanding obligations.
Equity investors, meanwhile, will be looking for evidence that the maintenance programme can deliver the expected recovery in generation capacity and earnings.
The immediate challenge for Geregu is therefore to bridge the gap between its longer-term recovery prospects and the near-term cash-flow pressure that has now resulted in a missed bond payment.