19th September 2023
The Managing Director of Asset Management Corporation of Nigeria, Mr Ahmed Kuru, has asked the owners of Arik Air to present a credible debt resolution plan to the bad debts manager if it hopes to recover the company from the Federal Government.
Arik Air was founded by Mr Arumemi Johnson. The airline was taken over by AMCON in 2017 after the carrier’s management failed to honour its debt obligation running into several billions of naira to the bad debt manager. AMCON had taken over debts from local banks owed by Arik.
According to Kuru, there is a need for the owners of the struggling airline to show better resolution strategy that will be acceptable to the Central Bank of Nigeria and the Ministry of Finance in order to recover the company.
The AMCON MD spoke in Lagos during a media forum. He spoke weeks after the Federal Government said plans were underway for the winding down of the bad debts manager.
“When we engage and arrive at that agreement, we will as AMCON go back to the Central Bank of Nigeria as well as the Ministry of Finance, and share such resolution strategy with them. If you recall, in the past, we resolved issues that are more difficult and more complicated than the Arik issue in the banking, oil and gas, and manufacturing sectors; as well as real estate and investment, automobile, telecommunications sectors just to mention a few. But for any resolution to take place, the two parties or the parties involved must have understanding. We are convinced that there is always a way out.”
In a statement, AMCON said alleged blackmail by owners of some airlines would not deter the corporation from doing what was right for the country.
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According to Kuru, the corporation exists to resolve debt with corporate entities, adding that its doors are open to willing debt companies to discuss resolution plans.
The statement read in part, “Lately especially since the coming of a new government led by President Bola Ahmed Tinubu GCFR, there has been heightened campaign by some recalcitrant AMCON debtors especially from its aviation portfolio that seeks to evoke the emotion of the public to perceive AMCON and its recovery activities from negative optical prism not minding the huge problem their debt to the federal government has caused the country.
“But those pushing that negative campaign forgot that Arik at the time had about 50 per cent passenger load before AMCON took over in 2017 under a receivership arrangement.
However, because the government of the day was interested in saving the airline because of its strategic role in Nigeria’s aviation sector, it felt strongly that the airline must be saved from imminent collapse and national embarrassment. At that time the government mandated AMCON to intervene in Arik, the airline was not paying staff salaries, insurance, and could not afford to buy aviation fuel to keep the planes flying, nobody including some key aviation international partners wanted to do business with Arik, among other issues. Everything was wrong with Arik as the airline delayed flights for two to three days in a row while its aircraft were being impounded abroad, which is a big embarrassment to the country. If AMCON had not stepped in at the time the government asked AMCON to intervene, Arik would have gone under within two weeks.”