NGX Listed Companies’ N21.3trn Debt Overhang: Areas Investors Must Pay Attention—Experts
OpenLife News reports that about 22 companies listed on the Nigerian Exchange Limited, NGX, are carrying a combined debt exposure of N21.3 trillion as at second quarter of 2026 as they seek to finance operations and generate returns.
OpenLife Business Desk analysis shows that of the 22 companies, 11 are operating with debt-to-equity ratios above 2.0, indicating heavy reliance on borrowed funds and raising red flags over interest costs, cash-flow pressures and shareholder returns.
The companies are VFD Group, United Capital, UACN, TotalEnergies Marketing Nigeria, Tantalizers, SCOA Nigeria, Nestlé Nigeria, Neimeth International Pharmaceuticals, MTN Nigeria, Mecure Industries, Infinity Trust Mortgage Bank, FTN Cocoa Processors, Ecobank Transnational Incorporated, Dangote Sugar, Conoil, C&I Leasing, BUA Cement, Aradel Holdings, AIICO Insurance, Access Holdings, Abbey Bank and Fortis Global Insurance.
Debt-to-Equity Above 2.0 – Danger Zone
FTN Cocoa Processors leads the high-leverage pack with a debt-to-equity ratio of 28.61, followed by SCOA Nigeria at 14.37 and United Capital at 6.52.
Others above the 2.0 threshold include Nestlé Nigeria 5.74; Fortis Global Insurance 4.66; UACN 4.10; Neimeth 3.29; Mecure Industries 3.0; MTN Nigeria 2.98; VFD Group 2.4; and Infinity Trust Mortgage Bank 2.18.
A ratio of 2.0 means N2 debt for every N1 equity, but analysts note there is no universal normal ratio as capital-intensive sectors like telecoms and manufacturing naturally carry higher leverage.
Debt Value Breakdown
Debt ranges from N9.31bn for Tantalizers to N7.27 trillion for Access Holdings. Other big exposures are Ecobank Transnational Incorporated N5.36trn, MTN Nigeria N2.78trn, Aradel Holdings N1.87trn, United Capital N1.22trn, BUA Cement N663.34bn, Dangote Sugar N584.61bn, Nestlé Nigeria N445.11bn, UACN N308.78bn, VFD Group N252.17bn, AIICO Insurance N129.66bn.
FTN Cocoa, which tops the leverage chart, has N22.42bn debt against just N783.65m equity. SCOA Nigeria is even more concerning with negative equity of N563.76m despite 14.37 ratio, meaning liabilities exceed its equity base.
What Investors Must Watch
Speaking, Ambrose Omordion, COO at Investdata Consulting said: “From an investor perspective, a high debt-to-equity ratio does not automatically mean distress. Investors need to examine earnings, cash flow, interest-cover ratio, maturity profile and purpose of debt.
“However, high leverage can magnify both gains and losses. Where borrowed funds are deployed into profitable investments, debt can enhance returns. Conversely, if cash flows weaken, a heavily indebted company may face difficulty meeting obligations.”
He advised investors to pay particular attention to companies where high leverage is accompanied by weak profitability, negative shareholders’ funds or declining cash flows.
Companies with lower, more manageable leverage include BUA Cement at 1.01, Aradel Holdings 1.22, AIICO Insurance 1.20, Conoil 1.62, C&I Leasing 1.50 and Ecobank 1.50.
On shareholder impact, Omordion added: “Rising leverage can increase sensitivity of profits and dividends to interest rates. Higher finance costs can reduce earnings available for distribution, while refinancing risks become pronounced when debt falls due.”
Economic Analyst Clifford Egbomeade said: “Debt levels should not be assessed in isolation. Investors need to consider quality of earnings, cash-generation capacity, asset base, interest obligations and sector.”
He noted for the economy, productive borrowing can finance expansion, employment and output, but excessive leverage could increase financial vulnerability, especially where companies depend on foreign-currency borrowing amid high financing costs and weak consumer demand.
The data underscores the importance of strong corporate governance, prudent borrowing and adequate capitalisation for NGX-listed firms, as corporate debt stress could affect bank asset quality and force firms to cut capex, jobs or expansion plans.
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