AMCON to Arik Air: We’re ready to sit down if a reasonable resolution plan is presented

The Asset Management Corporation of Nigeria (AMCON) says it is ready to sit down with the owners of Arik Air if a reasonable debt resolution plan is presented.

Ahmed Kuru, AMCON’s managing director, spoke during a media parley held in Lagos on Monday.

Kuru’s position comes a week after pilots and engineers appealed to AMCON to save the airline from total collapse.

Speaking at the press briefing, the managing director said despite the controversy that has trailed the takeover of the airline, AMCON remains a resolution agency of the government, “and we look forward to any obligor or debtor that wants to come discuss with us with repayment plans”.

He said while the conundrum with Arik Air may seem difficult, the situation is not irredeemable.

“Our doors are always open to resolve debts because that is our primary function. There is always a way out of every resolution situation. However, there must be a situation of give and take, which is what we (AMCON) have been trying to achieve,” Kuru said.

“We are ready to sit down with the owner or owners of Arik if they are ready to agree on what makes sense to us, to them, and the federal government.

“When we engage and arrive at that agreement, we will as AMCON go back to the Central Bank of Nigeria (CBN) as well as the Ministry of Finance (MOF), 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 banks, oil and gas, manufacturing sector, real estate and investment, automobile, telecommunications, 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.”

The AMCON boss said there are certain debt obligations that cannot be closed in a day.

He said while the Arik Air case is an example of such debt, the managing director said he could sit with them or anybody, to have a resolution.

“But you must have a mindset that you want to have a resolution. If your outstanding obligation of more than N240 billion, then you sit down with me, you say you will only give me 5 or 10 billion, then there is an issue.

“But if you look at what makes sense because let us not forget that for that N240 billion, I would have used my money to pay N70 billion on one side. And I even paid another N21 billion to help you.

“So basically the money that I put there, we have to talk about it. You know because if you shave it off, who is going to be responsible for the balance of the money?”

In February 2017, Arik Air was taken over by the federal government via AMCON due to the company’s huge debt profile, which was over N300 billion.

Due to this, the government immediately dissolved the airline’s management team and appointed a receiver manager.

‘ARIK AIR WOULDN’T HAVE LASTED TWO WEEKS IF WE DIDN’T TAKE OVER’

Speaking on the state of the airline, Kuru told journalists that Arik Air would not have lasted for two weeks if AMCON did not take over the its assets in 2017.

He explained that AMCON had to take over the airline due to the prevailing crisis at the time.

“When we came on board around 2015, we never went near Arik, because at that time Arik was carrying 50 percent of the passenger load,” Kuru said.

“But by 2017, Arik had entered a very big crisis. They were not paying salaries. They weren’t paying insurance. The technical partners, Lufthansa Technik, had gone.

“The guys they brought from Ethiopia had parked their bags; they were going. They had more than N32 billion to pay the regulators: FAAN, NCAA.

“Everything was problematic. Some of us will recall they were not delaying flights; they were cancelling flights for two to three days.

“And sometimes when you have an Arik ticket of (sic) 2017, if you recall, you will be at the airport for two to three days.”

Kuru said the delay was because the airline would collect flight ticket fees from passengers and then pay for aviation fuel before its flights could take off.

According to Kuru, the government (at that time) felt that AMCON needed to support, noting that if the agency “had not entered the company in 2017, it would not have lasted two weeks,” as the international community started harassing its aircraft and putting them on hold, over nonpayment of their commitments in international airports.