Geregu defaults on ₦40bn bond
Geregu Power has defaulted on its ₦40.09 billion bond after missing coupon and principal payments, as revenue plunged 78.7% following a major turbine maintenance programme.
Geregu Power Plc has defaulted on its N40.09 billion Series 1 Senior Unsecured Bond, missing its eighth semi-annual coupon payment and fourth principal repayment, according to FMDQ Securities Exchange. The seven-year bond was issued in July 2022 at a fixed interest rate of 14.5% and is scheduled to mature in 2029.
The default comes as Geregu faces a sharp decline in revenue and earnings. In the first half of 2026, revenue fell 78.7% to ₦18.65 billion, while profit after tax plunged 88% to ₦2.54 billion. The company attributed the downturn to a ₦61.47 billion major turbine maintenance programme, which reduced power generation and cash flows. Geregu’s shares have also fallen 27.7% this year. While GCR Ratings expects recovery after the maintenance programme, the bond default raises concerns over the company’s near-term liquidity and debt-servicing capacity.
The default is a significant blow to investor confidence in Nigeria’s power sector. Geregu is one of Nigeria’s most prominent power generation companies, and its inability to service its debt raises questions about the financial health of the sector. The company’s reliance on a single maintenance programme to explain its decline suggests deeper operational challenges.
This echoes the 2020 power sector debt crisis, which also saw generation companies struggle with liquidity. The mechanism then was different, but the result was the same: a sector struggling to remain solvent.
The winners: the maintenance contractor, which received ₦61.47 billion; and Geregu’s competitors, who may gain market share. The losers: bondholders, who face delayed payments; and Geregu shareholders, who have seen their investment decline.
Bottom Line: Geregu has defaulted on a ₦40 billion bond. A turbine maintenance programme crippled cash flow. The question is whether the company can recover before more defaults occur.