Geregu Defaults on N40bn Bond Payment Months After Otedola’s Exit

Geregu Power Generation Company has defaulted on a N40.09 billion bond payment, raising concerns among financial analysts over the power firm’s deteriorating financial position months after billionaire businessman Femi Otedola sold his majority stake in the company.

Geregu confirmed the default in an updated listing by the Securities and Exchange Commission.

The affected Series 1 Senior Unsecured Bond was issued on July 28, 2022, under the company’s N100 billion debt issuance programme.

The seven-year bond carried a fixed interest rate of 14.50 per cent and was structured to provide semi-annual coupon payments alongside amortising principal repayments until its July 28, 2029 maturity date.

The missed payment represents a breach of the bond obligations midway through its scheduled lifespan and has raised questions about the company’s ability to meet its financial commitments.

Financial analyst Olumide Adesina said the development would have triggered a major sell-off if Geregu were listed on the US stock market.

“Geregu would likely have lost a fifth of its value overnight if it were traded on the US stock market over news that it defaulted on its debt,” Adesina wrote on X.

Finance educator Toby also described the default as a major warning sign, particularly because of Geregu’s position as a power generation company.

“For a power generation company that supplies electricity in Nigeria, missing these payments is a serious red flag. It means their cash flow is under real pressure right now,” he said.

The concerns come amid a sharp decline in Geregu’s profitability.

According to the company’s unaudited financial statements filed with the Nigerian Exchange, Geregu recorded a profit after tax of N2.51 billion in the six months ended June 30, 2026, representing an 88 per cent decline from the N20.27 billion recorded during the corresponding period in 2025.

The company’s latest financial performance and bond default have therefore heightened concerns over its cash flow position and debt-servicing capacity.

Otedola, who previously held a majority stake in Geregu, sold his interest in December 2025 to MA’AM Energy Limited, a company linked to Senator Yari, in a transaction reportedly valued at N1.88 trillion.

The latest default has drawn renewed attention to Geregu’s financial position following the ownership change.