N40bn default: Agusto & Co withdraws Geregu power’s ‘A-’ rating

By Abubakar Yunusa

Agusto & Co., a pan-African rating agency, has withdrawn the ‘A-‘ credit rating assigned to Geregu Power and its N40.09 billion series 1 senior unsecured bond following the company’s default on its latest coupon and principal repayments.

The ‘A-‘ credit rating by Agusto & Co indicates a company has a good financial condition and a strong capacity to meet its obligations, but is still vulnerable to adverse economic changes.

In a statement over the weekend,the credit rating agency said the withdrawal was also due to its inability to obtain sufficient reliable information to maintain an opinion on the power company’s creditworthiness.

Agusto said Geregu Power’s management had informed it that the company’s previously issued financial statements were undergoing an independent verification process.

“Agusto & Co. has withdrawn the ‘A-’ rating assigned to Geregu Power PLC and its N40.09 billion Series 1 Senior Unsecured Bond following the Company’s recent default on the eighth coupon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 agency said.

“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.”

The agency said it was currently unable to rely on Geregu Power’s audited financial statements pending the completion of the verification exercise.

“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,” The rating company said.

Agusto said it would reassess Geregu Power’s rating after the completion of the independent forensic review and receipt of reliable financial statements for the year ended December 31, 2025.

The development comes after Geregu’s default on the eighth coupon payment and fourth bullet principal repayment of its N40.09 billion series 1 senior unsecured bond, which was raised to support the company’s funding requirements and planned expansion projects.

At the time of the issuance, Global Credit Rating (GCR) assigned the bond a national-scale long-term rating of A(Na), equal to the issuer’s rating.

The GCR said the rating reflected Geregu Power’s position as a leading Nigerian power generation company and its relatively high generation capacity, which had supported its earnings.

Responding to the matter, the power company said it was engaging relevant stakeholders and advisers.