Geregu Power pays $4.45 million to clear bond default as acting CEO Mohammed Sani Jaoji steps in

Geregu Power Plc has paid N6 billion ($4.45 million) owed to bondholders, resolving a weeks-long default that rattled Nigeria’s debt market, according to people familiar with the matter.

The payment came shortly after Mohammed Sani Jaoji took over as acting chief executive officer on Aug. 17, stepping in to steady the electricity producer amid steep revenue declines and a sweeping change in ownership.

While the company has not made a formal public announcement, sources confirmed the overdue obligation on its N40.09 billion ($29.7 million) Series 1 Senior Unsecured Bond has now been cleared.

Geregu Power debt restructuring updates

The FMDQ Securities Exchange had previously flagged the paper for “credit default in the eighth coupon payment and fourth bullet principal repayment.”

The listing on the exchange’s website continued to show the default status as of Thursday, though market participants expect an update following the settlement.

The payment brings immediate relief to creditors after credit rating agency Agusto & Co. withdrew its A- rating on Geregu and the bond program, citing concerns over the company’s financial reporting.

Geregu’s board said in a statement that it had carried out “a comprehensive review and reconciliation” of all liabilities, operational contracts, and debt arrangements.

The board added that it remains in talks with market regulators and financial advisers while focusing on power plant operations.

The bond was originally issued on July 28, 2022, under a N100 billion ($74.1 million) debt program. It carries a 14.5 percent interest rate and matures in July 2029.

What caused Geregu’s financial troubles?

The company’s debt troubles surfaced following a high-profile change of control late last year.

On Dec. 29, Nigerian politician Abdulaziz Yari bought a 95 percent stake in Amperion Power Distribution Company for $750 million through his firm, MA’AM Energy.

The buyout gave Yari control of the holding vehicle through which businessman Femi Otedola held a 77 percent indirect stake in Geregu.

A banking group led by Zenith Bank funded the deal, with Blackbirch Capital serving as financial adviser.

Otedola stepped down as chairman on the day of the sale, alongside eight other board members, including former Chief Executive Akin Akinfemiwa and Deputy Chief Executive Julius Omodayo-Owotuga.

The new management soon ran into sharp operational and financial headwinds.

For the six months ended June 30, Geregu’s profit after tax dropped 88 percent to N2.54 billion ($1.9 million), down from N20.27 billion ($14.9 million) a year earlier.

Revenue fell 78.7 percent to N18.65 billion ($13.7 million), compared with N87.63 billion ($64.3 million) in the first half of 2025.

The second quarter saw the steepest drop, with revenue plunging to N419.1 million ($308,000) from N55.87 billion ($41 million) in the comparable period of 2025.

The results fell far short of earlier management projections, which had targeted first-quarter revenue of N57.11 billion and a quarterly profit of N12.02 billion.

Geregu Power names Jaoji new CEO

The slowdown also hit the company’s equity valuation. Geregu’s market cap, which stood at N2.85 trillion ($2.1 billion) at the start of the year, has dropped 27.67 percent to N2.06 trillion ($1.51 billion).

To address the downturn, the board turned to Jaoji, who replaced interim head Sean Manley after Manley’s term expired on Aug. 14. Jaoji’s appointment remains subject to approval by the Nigerian Electricity Regulatory Commission.

A mechanical engineering graduate from Ahmadu Bello University in Zaria and a registered member of the Council for the Regulation of Engineering in Nigeria, Jaoji has spent more than three decades in the country’s electricity sector.

He worked at the state-run National Electric Power Authority before joining Geregu, where he served as head of maintenance planning and performance from 2007 to 2019.

He later served as technical assistant to Nigeria’s minister of power from 2019 to 2023 before returning to Geregu, where he now faces the task of rebuilding plant output and repairing ties with institutional investors.