…debt exceeds N30bn
An advise has been given by the Assets Management Corporation of Nigeria (AMCON) to Johnson Arumemi-Ikide, Arik Air’s Chairman, to devise a plan for debt recovery if he wishes to regain ownership of the airline.
This counsel was given by AMCON’s managing director, Mr Ahmed Kuru, during a media interaction in Lagos State.
AMCON, acting as the Federal Government’s specialised debt recovery entity, assumed control of Arik Air in February 2017 due to severe mismanagement by the airline’s owners and debts exceeding N300 billion, which were pushing the airline towards imminent collapse.
Arik had previously called for an amicable settlement of its debts in 2018 and 2022, which were welcomed by AMCON and Arik Air (in receivership) but ultimately failed to materialize.
Conditions for return to Arik Air’s ownership
AMCON’s MD emphasized that once a reasonable debt settlement with AMCON and the banks is reached, the receivership will be terminated, and Arik Air Limited will be returned to its shareholders/owners along with all documents and securities held by the airlines and the banks.
Kuru stressed that despite any negative portrayal of AMCON, it is primarily a resolution agency that supports businesses in the interest of the Nigerian economy.
In his words, “AMCON is a resolution agency of the government, and we look forward to any obligor or debtor that wants to come to discuss repayment plan with us.
“Our doors are always open to resolve debts because that is our primary function and aside from our recovery mandate, AMCON does not have a secret agenda.”
Kuru invited Arik’s owners to engage in discussions to create a repayment plan, emphasizing that AMCON is willing to collaborate with them and seek and seek approval from the Central Bank of Nigeria and the Ministry of Finance once an agreement is reached.
His words: “So the challenges of the founder of the airline to recover his airline might seem difficult, but not irredeemable, however, there is always a way out of every situation.
“There must always be a situation of give and take and AMCOM is now ready to sit down with the owners of Arik, if they are ready to agree on what is good for them and the Federal Government.
“When we engage and arrive at an agreement, we will go back to the Central Bank of Nigeria (CBN) as well as the Ministry of Finance (MOF), and share such resolution strategy with them.”
Kuru also mentioned that AMCON has successfully resolved more complex cases in the past, such as those involving banks, oil and gas, manufacturing, real estate, and telecommunications.
Debtors’ negative campaign and AMCON’s impact on Arik Air
The managing director expressed concern about a campaign by some AMCON debtors to portray the corporation’s recovery efforts negatively and noted that many debtors overlook the significant problems their debts have caused the country.
He recalled that Arik Air was in dire straits when AMCON intervened, facing issues like non-payment of staff salaries, insurance, and aviation fuel shortages, which had damaged its reputation and relationships with international partners.
In his words, “At that time the government mandated AMCON to intervene, the airline was not paying staff salary, or insurance, and could not afford to buy aviation fuel to keep the planes flying.
“It was so bad that nobody including some key aviation international partners wanted to do business with Arik among other issues.”
Kuru asserted that without AMCON’s intervention, Arik Air would have collapsed within two weeks.
He mentioned that upon learning of the impending closure of AMCON, certain debtors chose not to answer its calls. According to AMCON’s managing director, these debtors believe that AMCON would imminently cease operations, resulting in the government forgiving their debts.
Kuru emphasised that the gradual winding-down process of AMCON would not permit any debtor to escape their financial obligations, reaffirming that no government would tolerate debtors evading their responsibilities.
