Nigerian politician struggles to keep power company afloat after $750 million takeover

Barely nine months after Nigerian politician Abdulaziz Yari took control of Geregu Power Plc through his Abuja-based vehicle, MA’AM Energy, the power company is facing mounting pressure from falling revenue, weaker earnings and a missed debt payment.

Yari acquired a 95 percent stake in Amperion Power Distribution Company on Dec. 29 for $750 million, giving him control of the entity through which billionaire businessman Femi Otedola had held indirect control of 77 percent of Geregu’s listed shares.

The transaction was financed by a bank consortium led by Zenith Bank, with Blackbirch Capital serving as financial adviser. Otedola resigned as chairman on the day of the transaction. Eight other directors also stepped down, including Chief Executive Akin Akinfemiwa and Deputy Chief Executive Julius Omodayo-Owotuga. 

Yari was appointed chairman with immediate effect and a new board was installed. It included Abdulkadeer Njiddah as a non-executive director and Usman Gur Mohammed, Mahmud Magaji, Mohammed Sani Jaafaru and Neka Uzoamaka Adogu as independent non-executive directors.

Geregu’s debt burden gains focus

At the time of the takeover, Geregu was coming off a year in which its financial results appeared to offer little reason for concern. The company reported full-year 2025 revenue of N184.9 billion ($135.7 million), compared with N137.1 billion ($100.6 million) in 2024. Pre-tax profit rose slightly to N41.98 billion ($30.9 million), from N41.26 billion ($30.3 million).

The picture has since changed sharply. Geregu’s market capitalization stood at N2.85 trillion ($2.1 billion) at the start of 2026, making it the 10th most valuable stock on the Nigerian Exchange at the time. It is now worth N2.06 trillion ($1.51 billion), after the shares fell 27.67 percent since the beginning of the year.

The pressure became more serious after Geregu defaulted on its N40.09 billion ($29.4 million) Series 1 Senior Unsecured Bond, according to an updated listing status published by FMDQ Securities Exchange. The company missed both its eighth semi-annual coupon payment and its scheduled fourth principal bullet repayment.

The bond was issued on July 28, 2022, at a fixed interest rate of 14.50% under Geregu’s N100 billion ($73.4 million) debt issuance program. It has a seven-year term, with semi-annual coupon payments and principal repayments scheduled through its July 28, 2029, maturity.

The missed payment came well before the bond’s maturity date, putting the company’s ability to meet its debt obligations under greater scrutiny at a time when its operating cash flows have weakened considerably. Geregu’s latest financial results show just how quickly its finances have deteriorated.

Revenue slumps 79 percent after maintenance

For the six months ended June 30, 2026, profit after tax fell 88% to N2.54 billion ($1.9 million), from N20.27 billion ($14.9 million) a year earlier. Net profit margin fell to 13.34%, from 23.23%.

Revenue dropped 78.71% to N18.65 billion ($13.7 million), compared with N87.63 billion ($64.3 million) in the first half of 2025.

The second quarter was particularly difficult. Geregu generated just N419.1 million ($308,000) in turnover, compared with N55.87 billion ($41 million) in the same period a year earlier.

That collapse left the company well below the expectations it had set for itself earlier in the year. Geregu had forecast first-quarter 2026 revenue of N57.11 billion ($41.9 million), up from N31.75 billion ($23.3 million) in the first quarter of 2025. It also projected first-quarter profit after tax of N12.02 billion ($8.81 million), compared with N10.43 billion ($7.65 million) a year earlier.

The actual results were far weaker. Geregu has attributed the decline to a planned N61.47 billion ($45.1 million) major turbine maintenance program. The work was intended to support the long-term condition of the plant and maintain capacity availability, but it also reduced the amount of capacity and energy the company could bill for during the period.

That reduction has had a direct effect on revenue and cash generation. The company did receive some relief from financial asset impairment reversals of N16.12 billion ($11.82 million), which provided a partial cushion to its balance sheet. Total liabilities declined to N239.33 billion ($175.6 million) during the period.

Still, the missed bond payment shows that the company’s immediate challenge is not simply the size of its liabilities but its ability to generate enough cash to meet obligations as they fall due.

GCR Ratings has maintained a more measured view of Geregu’s longer-term position. The ratings agency affirmed the company’s national scale long-term issuer rating at A(NG) with a stable outlook, citing expectations that power generation and revenue will recover once the turbine maintenance work is completed and full available capacity returns to the national grid.

Geregu’s cash flows come under pressure

That assessment points to a company whose underlying position may remain stronger than its recent earnings suggest, but whose finances are under pressure now. Investors, meanwhile, have already marked down the value of the company.

Geregu’s shares closed at N825.7 ($0.60) on Aug. 12, down from N1,141.5 ($0.83) at the start of the year. The 27.67% decline has cut its market capitalization by about N790 billion, from N2.85 trillion ($2.1 billion) to N2.06 trillion ($1.51 billion).

For Yari, who took control of the company in a $750 million transaction less than a year ago, the deterioration presents an immediate financial test. Geregu has moved from reporting record-level revenue and modest profit growth for 2025 to dealing with a steep fall in sales, an 88 percent drop in first-half profit and a missed N40.09 billion ($29.4 million) bond obligation.

The company’s own figures show the scale of the change. Revenue of N184.9 billion ($135.7 million) in 2025 has been followed by just N18.65 billion ($13.7 million) in the first six months of 2026. Profit after tax of N41.98 billion ($30.9 million) last year has fallen to N2.54 billion ($1.9 million) for the first half of this year.

Geregu’s financial position therefore rests heavily on how quickly its power-generating capacity and revenue recover following the N61.47 billion ($45.1 million) turbine maintenance program. For now, the numbers show a company under strain, with its shares, earnings and cash flows all reflecting the pressure.