Arik and Aero Contractors airlines may combine and become a national carrier, according to the Asset Management and Corporation of Nigeria (AMCON).
This was said on Monday during an interactive meeting with media executives in Lagos, led by Gbenga Alade, the Managing Director and Chief Executive Officer of AMCON.
Alade claims that because Arik and Aero Contractor owe so much money, they might not be able to make the payments.
According to him, the corporation proposed to the former aviation minister to convert Arik and Aero Contractor, but the suggestion was turned down.
Alade stated: “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,” Alade added.
Recall that Nigeria Air was established by former Minister of Aviation Hadi Sirika three days before the conclusion of former President Muhammadu Buhari’s term in office.
Stakeholders were alarmed by the development because of the ownership structure that provided Ethiopian Airlines a 49% equity holding in the business. Three Nigerian investors together held 46% of the shares, with the Federal Government owning the remaining 5%.
In response to the agreement in June 2023, the House of Representatives called it a scam and requested that the Federal Government halt Nigeria Air’s operations. Festus Keyamo, the minister in charge at the time, declared in August 2023 that the national carrier project would be put on hold indefinitely.
According to Keyamo: “It remains suspended. It was never Air Nigeria. It was not Air Nigeria. That’s the truth. It was only painted by Nigeria Air. It was Ethiopian Airlines trying to flag our flag.
“If it is so, why not allow our local plane to fly our flag? So nobody should dispute that it was Nigeria Air.
“Air Nigeria must be indigenous, must be wholly Nigerian, and must be for the full benefits of Nigeria, not that 50 percent of the profit is for another country,” Keyamo added.
The sale of Nigeria Air to Ethiopian Airlines was recently blocked by a Federal High Court located in Lagos. After deciding the suit’s concerns, the court ruled that the sale of Nigeria Air’s shares to Ethiopian Airlines was void.
Justice Ambrose Lewis-Allagoa issued an order stopping the Federal Government’s ambitions to launch Nigeria Air as a national carrier. The ruling was rendered in support of five additional aviation industry stakeholders as well as the Registered Trustees of the Airline Operators of Nigeria.
Alade claimed during the Monday briefing that he had been having sleepless nights due to Arik and Aero Contractors’ current situation.
Continuing, Alade stated: “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 added.
He went on to say: “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.”
Following discussions, he indicated that the airline was only prepared to accept $8.5 million of the $52 million.
He had this to say: “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 added.
Citing the PUNCH that recollects that Arik’s aircraft were grounded by the Nigerian Airspace Management Agency due to a court order initiated by Arthur Eze, a rich businessman, and the airline’s creditor. Eze had gone to court to challenge being owed $2.5 million by Johnson Arumemi-Ikhide, the man who founded Arik Air.
NAMA’s spokesperson, Abdullahi Musa, explained in a statement that the development resulted from an enforcement action taken on July 19, 2024, by the FCT High Court, wherein Arik’s planes were attached to secure the debt.
After dissolving the business’s board and assigning a manager to oversee Aero Contractors’ operations in the interim, AMCON assumed management of the company in 2016.
In a statement released by its media advisory firm, AMCON stated that the choice to assume control of the business was made to advance its obligation to obtain qualified bank assets and utilise them profitably for economic purposes.
Similar to this, Mr. Arumemi Johnson launched Arik Air, which AMCON acquired in 2017 due to the carrier’s management’s inability to pay off debt of several billions of naira. AMCON has acquired Arik’s obligations from neighbourhood banks.
The company obliged Arik’s owners to present a strong debt settlement plan to the bad debt management last year to keep the company from going bankrupt.
AMCON’s efforts to retrieve property
Alade stated plans to work with international asset tracers to find and retrieve assets hidden by uncooperative debtors offshore, including those disguising themselves as special purpose entities, to collect unpaid debts of nearly N5 trillion.
