FMDQ Flags Debt Service Failure
Geregu Power Plc has defaulted on its N40.09 billion Series 1 Senior Unsecured Bond. The company missed both its eighth semi-annual coupon obligation and its scheduled fourth principal bullet repayment, according to an updated listing status published by FMDQ Securities Exchange.
The 7-year bond, issued on July 28, 2022, at a fixed rate of 14.50% under the company’s N100 billion debt issuance programme, was structured with semi-annual coupon distributions and amortising principal repayments running through to a July 28, 2029, maturity.
The missed payment represents a breach midway through the bond’s life, rather than at maturity, raising immediate concerns about the power generation company's near-term liquidity position. FMDQ Securities flagged the status as a credit default on its official platform.
Earnings and Revenue Collapse in First Half
The default follows a sharp slowdown in operational cash flows during recent quarters, driven by a collapse in both revenue and profitability. For the six-month period ended June 30, 2026, Geregu Power’s profit after tax dropped 88% to N2.54 billion from N20.27 billion in the corresponding 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 decline was most severe in the second quarter of 2026, when the company generated just N419.1 million in turnover, compared with N55.87 billion in Q2 2025.
The revenue and earnings crash stands in sharp contrast to the company’s own guidance earlier in the year. Geregu had forecast Q1 2026 revenue of N57.11 billion and a projected profit after tax of N12.02 billion, expectations that have been entirely missed.
Turbine Maintenance Drives Cash Flow Strain
Geregu Power has attributed the operational slowdown to a planned N61.47 billion major turbine maintenance programme. While the overhauls are intended to secure long-term plant integrity and capacity availability, the temporary loss of billable capacity has weighed heavily on near-term cash generation, culminating in the bond default.
Despite the missed payments, the company reported some balance sheet resilience. Financial asset impairment reversals of N16.12 billion provided a partial cushion, and total liabilities declined to N239.33 billion during the period.
GCR Ratings affirmed Geregu Power’s national scale long-term issuer rating at 'A(NG)' with a Stable outlook. The rating agency cited expectations of a recovery in power generation and revenue once the turbine overhauls are completed and full available capacity returns to the national grid.
Investors React as Share Price Drops
The market has begun pricing in the financial deterioration. Geregu's share price has fallen 27.67% since the start of the year, closing at N825.70 on Friday, August 7, 2026, down from N1,141.50 at the beginning of the year.
Geregu Power acquired its generating plants in Ajaokuta in 2013 and listed on the Nigerian Exchange four years ago. Bondholders are now watching closely to see if the company cures the default within any applicable grace period and provides a clearer timeline for full capacity restoration.
