The pending court hearing notwithstanding, Asset Management Corporation of Nigeria (AMCON) has hinted on plans to withdraw from ownership and operations of embattled Arik Air.
AMCON, which is the Federal Government’s special purpose vehicle for asset recovery, foresees its withdrawal in the nearest future, either by means of a win-win negotiation with the Arik shareholders or outright liquidation of its assets.
The Guardian sources hinted that AMCON’s takeover of the “technically insolvent” airline in 2017 was more of a political and economic consideration of the then administration, than survivability of the distressed airline. Hence, the decision to withdraw grips from the airline soon.
It will be recalled that AMCON took over Arik Air in February 2017 as part of measures to “save” the airline from “imminent collapse”. AMCON had cited gross mismanagement by the owners of Arik, and debt of over N300 billion.
In a recent twist to the development, the Chairman of Arik Air, Johnson Arumemi-Ikide, attempt to reclaim the airline’s headquarters following a Federal High Court ruling that faulted AMCON on transparency, transfer of Arik’s asset to float a new airline, and barring of Arumemi-Ikide and co. from the Arik Air facilities.
The Receiver Manager of Arik Air, Kamilu Omokide, yesterday confirmed that AMCON, besides the liquidation option, still has other cards of a peaceful reclaim of assets laid on the table for the shareholders.
Omokhide said it was clear from the outset that the airline was in distress since 2015, and has been making losses since 2014 till date, especially due to its wrong strategy in international expansion and punching above its borrowing weight.
He, however, reiterated that AMCON had on at least three occasions – in 2018, 2019 and 2022 – made efforts at amicable settlement of the debt, for the return of the airline back to the shareholders.
In a 2018 memo to AMCON, the shareholders had hinted of a ready investor willing to settle the Arik’s outstanding. The Management of AMCON agreed (subject to regulatory approvals) to settle the then indebtedness of Arik Air with the payment of the sum of N65 billion to AMCON in full, and final settlement of AMCON’s debt of N135.3 billion.
Again, following a December 2019 letter, the major shareholders of Arik approached AMCON for a meeting to negotiate a discount on the expired offer to pay N65 billion. The Receiver Manager invited them to a meeting with the Management team of AMCON. No further reply was received, though later blamed on the ill-health of the Arik founder.
Omokide said: “If the entity (shareholders) is ready to cooperate, then we will support them. There are several options to consider, not just the liquidation. The owners of the company can work with AMCON to bring in new investors.
“We can do a scheme of arrangement. Some of the methods can work side by side. They can also approach AMCON and give a settlement that is good and AMCON will give concessions. They will put monies and assets down, and AMCON will move on,” he said.
Omkide assured that despite the frosty relation that has landed the parties in the law court, AMCON will not reject money proposed by the shareholders.
“If they come to the table with a good proposal, AMCON will look at it. The frosty relationship for AMCON is normal, because we know that recalcitrant debtors will not want to pay anyway.
“We have seen this in many cases, but we are focused on our objective, which is to recover. If after the drama, the somersaulting and the screaming, the debtor puts money on the table, AMCON will smell it, and if that is good, AMCON will eat it, and take a walk. That is what AMCON is called to do. AMCON is not emotional about the attacks. It is not a personal issue,” Omokide said.
