The Asset Management Corporation of Nigeria (AMCON) is exploring a potential merger of Arik Air and Aero Contractors into a national carrier, in an effort to save the two struggling airlines from crippling debt burdens that could permanently halt their operations.
The AMCON Managing Director, Gbenga Alade, stated this during an interactive session with media executives in Lagos, Alade explained that both airlines are heavily indebted and may not be able to pay their debts. He noted that the corporation had previously presented the idea of converting the airlines to a national carrier to the former aviation minister, but it was rejected.
However, AMCON plans to present the idea again, as it believes it is the best option.
The move comes after the Federal Government’s plan to establish a national carrier, Nigeria Air, was suspended indefinitely. The project had faced criticism over its ownership structure, which gave Ethiopian Airlines a 49% stake. A Federal High Court recently halted the sale of Nigeria Air to Ethiopian Airlines, declaring the sale null and void.
Alade revealed that Arik is owing significant debts, including $52m to Afreximbank. He stated that AMCON has been negotiating with creditors to find a solution, including offering a bank guarantee to allow Arik to continue operating.
AMCON took over the management of Aero Contractors in 2016 and Arik Air in 2017 due to their inability to meet their debt obligations. The corporation has been working to recover debts from recalcitrant debtors, including engaging international asset tracers to locate hidden assets offshore.
Alade emphasized AMCON’s commitment to recovering debts and improving the business environment in Nigeria. He noted that the corporation has made significant progress in recovering debts and resolving issues in the oil and gas, power, and telecommunications sectors.
