AMCON links debtors with private investors
• Says mergers, acquisition not solution to aviation crisis
Debts buying firm, Asset Management Corporation of Nigeria, said it has begun linking prospective foreign investors with debtors, with a view to salvaging their businesses.
The development comes as AMCON disclosed that the Federal Government had no intention to force mergers and acquisition on operators in the troubled aviation industry.
AMCON’s Managing Director/Chief Executive Officer, Ahmed Kuru, said: “Some of them (debtors) don’t have capability; some don’t have cash and some don’t have the right temperament. So, we’re bringing them (investors and debtors) together. Instead of taking over the businesses, the three of us can come together and allow professionals run the businesses.”
He revealed that AMCON was in talks with a lot of prospective investors in this regard. “All that is required is have an understanding. You know, due diligence takes time and it also takes time to identify the area you want to go into. We’re talking to quite a lot of investors, especially from outside, in terms of partnering with AMCON.”
He said some prospects, so far, have expressed interest in diverse areas including fast-moving consumer goods, aviation, oil and gas, and steel manufacturing.
“We’re just the repositories of all these businesses. They will tell us the areas they’re interested in, and we would show them available businesses in the sector.”
Kuru further explained that to streamline the debts, AMCON had to restructure its businesses along sectorial lines, adding that it already had groups that understood issues of agriculture, manufacturing and aviation.
He said AMCON was working in collaboration with other government agencies, such as the Ministry of Finance. “They (Finance) have created a framework where they will also invite and attract some of the investors directly through their own initiatives in the areas of agriculture and manufacturing, to expand the economy and also increase employment.
“We’re also talking with the National Sovereign Wealth Fund. They recently launched their fund for agriculture and real estate, so there are so many activities happening around the Ministry of Finance, and how to jump-start the economy.”
Clarifying how AMCON links up the investors to the debtor companies, Kuru said: “Most of these companies have bad loans, but they have underlining businesses, and these bad loans may be as a result of bad corporate governance, lack of working capital, or lack of understanding of the market. These people, coming from the outside, have the understanding, they have the skills, and they have the working capital. They’re bringing all these to bear, and the market is also here.”
On aviation, the AMCON boss said there were still prospects for the industry.
“A lot of measures are being put in place by the Ministry of Aviation. But the current template needs to be addressed, as there are a lot of institutional reforms required.”
He argued that mergers and acquisition couldn’t offer immediate solution, since the sector is private led, and advocated consultations.