Nigerian companies with the highest external debt

An analysis of 32 NGX-listed companies shows that while several businesses reduced borrowings in the first nine months of 2026, others continue to face pressure from high financing costs, weak equity positions, and limited cash coverage.

The 31 companies with December financial year-ends reported combined interest-bearing borrowings of N7.92 trillion as of September 30, 2026, down 26.9% from N10.83 trillion in December 2025.

Borrowing money is not necessarily a problem for a business. Companies use debt to expand production, acquire assets, finance working capital, and support future growth.

The concern begins when debt grows faster than a company’s capacity to repay it, or when financing costs consume a significant portion of operating earnings.

For this assessment, Nairametrics examined outstanding interest-bearing borrowings, debt relative to shareholders’ equity, finance costs, operating profit, and cash generation.

The findings highlight several companies whose debt positions deserve closer attention.

• Oando recorded the highest outstanding borrowings among the Nigerian companies analysed, with N2.16 trillion as of September 2026.
• It was followed by Aradel Holdings with N1.51 trillion and Seplat Energy with N1.05 trillion.
• BUA Cement ranked fourth with N656.85 billion, followed by Dangote Cement with N541.53 billion and Nestlé Nigeria with N426.31 billion.

Completing the top ten were MTN Nigeria with N333.32 billion, UAC of Nigeria with N262.63 billion, Presco with N140.26 billion and Transcorp with N131.82 billion.

Together, these ten companies reported N7.21 trillion in outstanding borrowings as of September 30, 2026.

• Airtel Africa was excluded from this ranking because its consolidated borrowings cover operations across 14 African countries, rather than Nigeria alone.
• Its September 2026 financial statements reported $2.18 billion in borrowings, equivalent to N2.90 trillion using the exchange rate provided in the financial statements.

However, the size of outstanding borrowings does not necessarily indicate financial distress. Some companies have substantial debt supported by strong earnings and cash generation, while others carry smaller balances that place greater pressure on their financial resources.

The analysis therefore further examines whether companies generated sufficient earnings and operating cash flow to service their obligations, rather than relying on absolute borrowing levels alone.

FTN Cocoa: Debt almost 18 times shareholders’ equity

FTN Cocoa Processors stands out because of the size of its borrowings relative to the financial resources supporting its operations.

At September 30, 2026, the company reported total borrowings of N21.95 billion, down 5.4% from N23.21 billion in December 2025. Although the reduction is positive, shareholders’ equity stood at just N1.23 billion.

• This means FTN Cocoa has N17.89 in borrowings for every N1 of shareholders’ equity, one of the highest debt-to-equity ratios among the companies examined.
• Its cash balance of N1.79 billion covered only a small portion of outstanding debt, leaving net debt of N20.16 billion.

The company’s reported operating profit also requires closer examination.

• FTN Cocoa recorded an operating profit of N2.08 billion during the nine months, compared with an operating loss of N328.18 million in the corresponding period of 2025.

However, it recognized N2.08 billion in foreign exchange gains. Excluding those gains, the company would have recorded a marginal operating loss.

Finance costs increased from N365.11 million to N617.71 million, while operating cash flow declined from N2.99 billion to N1.89 billion.

The concern is therefore not simply the outstanding debt, but whether the company’s underlying operations can generate sufficient recurring earnings to service it.

UAC Nigeria: N262.63 billion debt weighs on earnings

The diversified conglomerate reduced its borrowings by 23.8%, from N344.81 billion in December 2025 to N262.63 billion in September 2026.

However, its debt remained substantial relative to shareholders’ equity of N70.85 billion. Its debt-to-equity ratio stood at 3.71 times, while net debt was N231.09 billion.

The more significant concern is the cost of maintaining those obligations.

• UAC’s finance costs increased from N8.68 billion in 9M 2025 to N38.90 billion in 9M 2026, representing an increase of approximately 348%. Operating profit also increased sharply from N13.42 billion to N59.53 billion.
• Despite this improvement, operating profit covered finance costs only 1.53 times, compared with 1.55 times in the prior-year period. That means UAC generated N1.53 in operating profit for every N1 of reported finance costs.

Nevertheless, the company recorded a substantial improvement in operating cash flow, which increased from N21.56 billion to N103.00 billion. This provides some reassurance about its capacity to meet financial obligations.

Its results also reflect the expanded contribution of the packaged food and beverages business following the acquisition of CHI Limited, making the year-on-year comparison partly dependent on changes in the group’s structure.

MeCure Industries: Financing costs absorb half of operating profit

Total interest-bearing debt increased by 7.5%, from N55.33 billion in December 2025 to N59.51 billion in September 2026.

• Its shareholders’ equity stood at N24.59 billion, translating to a debt-to-equity ratio of 2.42 times.
• More importantly, the company reported cash holdings of just N4.32 billion, leaving net debt of N55.18 billion.
• During the nine months, MeCure generated N17.49 billion in operating profit but incurred N8.84 billion in finance costs.

Consequently, its operating profit covered finance costs approximately 1.98 times.

In practical terms, about half of its operating profit was equivalent to the reported cost of financing the business.

• Finance costs increased by 33%, broadly matching the 34.3% growth in operating profit.

One encouraging development was the recovery in operating cash flow, which moved from negative N5.40 billion in 9M 2025 to positive N10.36 billion in 9M 2026.

TotalEnergies Marketing: Thin earnings cushion despite improvement

TotalEnergies Marketing Nigeria illustrates how a company can reduce borrowings and still face financing pressure.

• Its total borrowings declined modestly from N84.67 billion in December 2025 to N81.76 billion in September 2026.
• The company had N53.38 billion in shareholders’ equity, resulting in a debt-to-equity ratio of 1.53 times.
• Its interest-bearing obligations included N59.26 billion in bank overdrafts and N22.50 billion in short-term intercompany borrowing.

The short-term nature of these facilities creates liquidity and refinancing considerations.

TotalEnergies generated operating profit of N19.16 billion in 9M 2026, a significant improvement from N5.65 billion in the corresponding period of 2025.

• Finance costs also declined from N20.55 billion to N12.30 billion.

Despite these improvements, interest coverage stood at just 1.56 times. This represents a substantial recovery from 0.28 times in 9M 2025, when operating profit was insufficient to cover reported finance costs.

Conoil also warrants attention because of its rising borrowing exposure.

• Its outstanding debt increased from N54.90 billion in December 2025 to N64.80 billion in September 2026, representing an 18% increase. Compared with September 2025, borrowings rose by 63.3%.

With shareholders’ equity of N44.55 billion, its debt-to-equity ratio stood at 1.45 times.

The more concerning indicator is the relationship between its cash generation and financing obligations.

• Conoil’s operating cash flow was N274.81 million during the nine months, while reported interest payments were approximately N12.99 billion.

This suggests that cash generated from ordinary operations during the period was insufficient, on its own, to cover financing payments.

However, this comparison needs to be interpreted alongside movements in working capital, available liquidity, and other financing sources.

For investors, the question is whether the weakness in operating cash generation is temporary or reflects a more persistent financing challenge.

Transcorp Hotels: Debt rises more than fivefold

Its borrowings increased from N10.52 billion in December 2025 to N54.96 billion in September 2026, representing a 422.5% increase. The additional debt changed its balance-sheet position significantly.

The company moved from net cash of N6.44 billion at December 2025 to net debt of N34.62 billion by September 2026.

• At the same time, operating profit declined marginally from N24.71 billion in 9M 2025 to N24.36 billion in 9M 2026.
• Finance costs more than doubled from N2.80 billion to N5.91 billion.
• Its interest coverage weakened from 8.82 times to 4.12 times.
• More importantly, operating cash flow deteriorated from positive N18.82 billion to negative N15.93 billion.

The critical issue is whether the increased borrowings support investments that can generate sufficient future cash returns.

Not every large borrower is under pressure. The analysis also reveals why absolute borrowing balances can be misleading.

• Dangote Cement reduced borrowings from N1.08 trillion in December 2025 to N541.53 billion in September 2026.
• MTN Nigeria also reduced conventional borrowings from N527.67 billion to N333.32 billion, although its substantial lease liabilities must be considered separately.
• Nigerian Breweries eliminated its outstanding conventional borrowings, compared with N59.71 billion at December 2025.

Meanwhile, Nascon Allied Industries, Unilever Nigeria and Okomu Oil Palm maintained relatively low conventional borrowing exposure and substantial cash coverage.

These companies demonstrate that debt sustainability depends on the relationship between financing obligations, profitability, liquidity and cash generation.

What investors should know

For investors assessing corporate debt, three questions are particularly important.

• First, how much debt does the company carry relative to shareholders’ equity and its ability to generate earnings?
• Second, how much of its operating profit is being consumed by finance costs?
• Third, does the business generate sufficient operating cash flow to repay borrowings without relying excessively on fresh debt or equity injections?

The 9M 2026 financial statements show that FTN Cocoa, UAC Nigeria, MeCure Industries, TotalEnergies Marketing and Conoil warrant particularly close scrutiny.

However, these findings do not establish that any of the companies is unable to repay its obligations.

The central lesson is that debt becomes a problem not simply when the amount is large, but when the business struggles to generate sufficient earnings and cash to sustain it.