Geregu Power Plc has defaulted on its N40.09 billion Series 1 Senior Unsecured Bond, missing both its eighth semi-annual coupon obligation as well as its scheduled fourth principal bullet repayment.
The company’s updated listing status published by FMDQ Securities Exchange on its website indicated that the default followed a sharp slowdown in operational cash flows of the electricity generation company (GenCo) in recent quarters, driven by drop in both its revenue and profitability.
According to the data, for the six months period ended June 30, 2026, Geregu Power’s profit after tax (PAT) dipped by 88% to N2.54 billion from N20.27 billion in the corresponding period of 2025, while its net profit margin shrank to 13.34% from 23.23% a year earlier.
Similarly, the GenCo’s revenue dropped by 78.71% to N18.65 billion from N87.63 billion in H1 2025, most severe in Q2, when the company generated just N419.1 million in turnover, compared with N55.87 billion in the corresponding period of last year.
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The company’s management had projected that the GenCo’s revenue in Q1 this year would hit N57.11 billion, higher than the N31.75 billion it generated in the corresponding quarter of last year, even as it estimated the PAT to grow to N12.02 billion compared to last year’s N10.43 billion.
The management has attributed the operational slowdown of the company to a planned N61.47 billion major turbine maintenance programme initiated to secure long-term plant integrity and capacity availability.
However, the temporary loss of billable capacity and energy output has weighed heavily on near-term margins and cash generation, culminating in the bond default.
Market analysts believe that the GenCo’s bond default appears to reflect more than the temporary impact of turbine maintenance as its financials were already showing signs of strain over the past year.
For instance, the company’s operating cash flow dropped to ₦19.6 billion in 2025 despite ₦27.3 billion in profit just as working-capital pressures and delayed receivables weakened liquidity.
The management had projected ₦44.3 billion revenue for the company and ₦29.4 billion in operating cash flow in Q2 2026 but the revenue dropped to about ₦419 million.
Meanwhile, Geregu Power board had proposed and subsequently declared a ₦22.5 billion dividend for 2025, which was far higher than the ₦19.6 billion operating cash flow generated by the company.
Investment experts are of the view that while improved power generation and the settlement of outstanding power-sector receivables could support a recovery, investors will now need evidence of stronger cash collections, restored output and a prompt resolution of the default to sustain their confidence in the company.
