2 months ago
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The Asset Management Corporation of Nigeria (AMCON) may merge Arik Air and Aero Contractors and convert them into a national carrier, according to AMCON Managing Director/CEO, Gbenga Alade.
Speaking at an interactive session in Lagos on Monday, Alade noted that both airlines owe significant sums that they are unlikely to repay.
Alade explained that AMCON had previously proposed the idea of converting Arik and Aero into a national carrier to the former aviation minister, Hadi Sirika, but it was rejected.
He added that despite the sale of a special purpose vehicle (SPV) initially intended for the project, the corporation is considering creating a new SPV to revisit the proposal.
“The former management of AMCON presented the idea of converting Arik and Aero to a national carrier. But the former aviation minister did not buy the idea. We will present it again because that is the best option.
“Unfortunately, the special purpose vehicle that was created by the former management of AMCON for the conversion of Arik and Aero to a national carrier had been sold. But we can create another SPV this,” he explained.
He also noted the financial struggles of the airlines, particularly Arik, which owes over $52 million to creditors, including Afreximbank. Despite efforts to negotiate a settlement, Alade stressed that Arik’s financial situation is dire.
“Believe me, it is a very difficult problem to resolve, and it is giving me sleepless nights, particularly Arik. Arik is owing so much that they cannot pay,” he stated. “There is a way out. We have met all their major international creditors. Afreximbank is one of them. They (Arik) are owing Afreximbank about $52m.”
After negotiations, he said the airline was only willing to take $8.5m out of the $52m.
“However, where will that $8.5m come from? Where? AMCON doesn’t have money of his own to put there? And then they negotiated and said, okay, ‘let’s take some of the engines of those things away in full and final settlement’. And the truth is that, if they took those engines away, Arik is finished.
“But we said ‘no, we cannot allow you to take it away. Let AMCON give you a kind of bank guarantee. And we will stretch it so that three planes are flying now and by the Lord’s grace, by February next year, we want to make seven planes fly for Arik,” he stated.
In 2016, AMCON took over Aero Contractors, followed by Arik Air in 2017, after both airlines failed to meet their debt obligations, which totalled billions of naira.
AMCON’s ongoing asset recovery efforts include plans to engage international asset tracers to recover assets hidden by debtors abroad.
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