Long-term shareholders of Geregu Power Plc are navigating severe wealth erosion after the company’s stock plunged to a 52-week low of N825.70. This 27.67 percent year-to-date decline has wiped out approximately N789.5 billion from the power generation company’s valuation.

At the start of 2026, the stock commanded N1,141.50 per share, valuing the firm at a robust N2.854 trillion. Today, the stock is testing investor patience as trading activity is caught in a limbo while market participants search for fresh catalysts to spark a recovery.

BusinessDay had earlier reported that Geregu defaulted on its N40.09 billion Series 1 Senior Unsecured Bond, missing its eighth semi-annual coupon and scheduled fourth principal repayment – a sign that the company is currently in turbulent waters. This became Nigeria’s first corporate bond default in seven years.

Agusto & Co has withdrawn the “A-” rating assigned to Geregu Power Plc and its N40.09 billion Series 1 Senior Unsecured Bond following the Company’s recent default on the eighth coupon payment and fourth principal repayment.

“The withdrawal reflects both the default event and Agusto & Co’s conclusion that it no longer possesses sufficient reliable information to maintain a credit rating opinion. Management has advised that previously issued financial statements are undergoing an independent verification process.

“Pending completion of this review, Agusto & Co is unable to rely on the current audited financial statements and, therefore, cannot provide an opinion regarding the Company’s creditworthiness. We will undertake a reassessment of the Company’s rating upon completion of the ongoing independent forensic review and receipt of reliable financial statements for the year ended December 31, 2025,” Agusto & Co said.

“Geregu Power’s bond default reinforces the importance of looking beyond historical financial performance when assessing creditworthiness”, said Intelligence Africa Analytics Limited in its August 10 credit market watch.

They acknowledge that Geregu Power Plc bond default represents a significant event for Nigeria’s corporate debt market, adding that it places renewed focus on the role of credit risk analysis in Nigeria’s debt capital markets and the factors that underpin robust, forward-looking credit assessments.

“Intelligence Africa Ratings (IA) does not currently rate Geregu Power. However, we assess other entities and instruments exposed to Nigeria’s power sector and incorporate the sector’s systemic risks into our credit assessments through our Industry Profile Adjustment,” they noted.

For equity investors and stakeholders in Geregu Power Plc, Agusto & Co.’s withdrawal of the “A-” rating – triggered by a missed bond coupon and principal repayment alongside an ongoing independent verification of its financial statements – is a critical red flag.

As a cloud of uncertainty over the company’s past financial reports thickens, it has deeply unnerved institutional investors, rating agencies, and bond trustees, making it difficult to accurately gauge the company’s baseline health.

Stock investors are actively pricing in Geregu’s risks, but the market’s response has manifested as stagnation and heavy downside contraction rather than a sudden, panic-driven freefall.

Based on the data provided at the NGX, the total volume of Geregu stocks traded across those seven days trading sessions is just 15,666 shares.

The gravity of the current situation – marked by a missed bond coupon, a missed principal repayment, the withdrawal of its “A-” credit rating by Agusto & Co., and ongoing independent verification of past financials – is being factored into the stock in distinct ways.

The trading pattern from August 6 -14 highlights an intensely illiquid or locked trading phase, where holders of Geregu stocks were mostly unwilling to sell lower and buyers are hesitant to step in, leaving the stock completely immobilised at the floor of its 52-week low range.

Geregu Power Plc recently responded to the investors and stakeholders concerns regarding the company’s bond repayment obligation, saying it remains actively engaged with relevant stakeholders and advisers regarding the resolution of the various challenges and is committed to achieving an orderly and mutually beneficial outcome.

“Discussions and engagements are ongoing, and the company will continue to act in good faith in fulfilling its responsibilities. The Board and Management remain committed to transparency, responsible corporate governance and constructive engagement with all stakeholders,” Geregu said in a statement on August 12.

The power generation company had pushed its balance sheet to the absolute limit in its 2025 financial year, choosing to aggressively drain its cash reserves to maintain a massive N22.5 billion dividend payout to shareholders despite a squeeze on its bottom line.

Surprisingly, at the company’s annual general meeting held in Abuja on Tuesday June 30, the Abdul-Aziz Abubakar Yari-led Board of Directors of Geregu Power Plc got shareholders approval to pay that massive dividend.

While a marginal dip in net profit – from N27.43 billion in 2024 to N27.25 billion in 2025 – would typically prompt a conservative approach to capital preservation under Nigeria’s high-inflation macroeconomic climate, the utility firm defied the headwinds by committing to an audacious 82.5 percent payout ratio.

The board had approved a dividend of N9 per share subject to the approval of shareholders at that meeting. This is compared to 2024 when the board and the shareholders approved a dividend of N8.50 per share for the audited financial statement.

A close look at the company’s audited financials reveals that this corporate generosity of paying N22.5billion in dividend despite marginal 0.64 percent profit dip was fueled by heavy trade-offs rather than fresh operational cash.

Though the company’s revenue rose to N184.935 billion in 2025 as against N137.126 billion in 2024, this aggressive 82.5 percent dividend payout ratio was a critical statement of intent.

Despite the controversy surrounding the business, the utility company went ahead to appoint Mohammed Sani Jaoji as its acting Chief Executive Officer.

This leadership change represents the company’s second major executive shakeup in just seven months, as the power producer navigates a challenging landscape and struggles to position itself for growth.

Jaoji served as Technical Assistant to the Minister of Power between 2019 and 2023, before returning to Geregu Power Plc.

Geregu had in January 2026 tapped Siemens Energy’s Sean Manley as interim CEO to also spearhead its new growth strategy.

Manley became the interim Chief Executive Officer (CEO) effective February 2, 2026 and his tenure ended on August 14, 2026, according to Geregu.

On Monday August 17, the Board of Geregu Power Plc said Jaoji appointment is subject to the approval of the Nigerian Electricity Regulatory Commission (NERC).

Jaoji holds a Bachelor of Engineering degree in Mechanical Engineering from Ahmadu Bello University, Zaria, and is a registered member of the Council for the Regulation of Engineering in Nigeria (COREN).

“He brings over three decades of experience in the power sector, spanning technical and leadership roles at the National Electric Power Authority (NEPA) and Geregu Power Plc, where he served as Head, Maintenance Planning and Performance between 2007 and 2019,” a statement from the company said.

The Board expressed confidence that the appointment will strengthen the governance structure and strategic direction of the company pending the appointment of a substantive Chief Executive Officer.

“This appointment is following the non-renewal of the term of the Interim Chief Executive Officer, Sean Manley which ends on August 14, 2026,” the statement added (BusinessDay)

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