AMCON ‘takes over’ Arik Air

The Asset Management Corporation of Nigeria (AMCON) has taken control over Arik Air on yesterday according to reports. The six-year old airline is already struggling for years to meet its financial obligations and is said to be indebted for over N20 billion.

It was learnt that the takeover was as a result of the Arik’s inability to pay back several billions of naira it owed banks. AMCON had in April last year given the airline a N4.5bn lifeline. The capital injection, it was learnt, followed the acquisition of most of Arik’s debts from two Deposit Money Banks in December 2010. Sources said Arik’s debts were part of the non-performing loans purchased by AMCON in the first phase of its rescue programme in the banking sector. Arik had reportedly been struggling to meet its financial obligations in the last few months. The development is coming barely six years after the airline was established. AMCON had recently vowed to use all means possible to recover all its debts.

However, it now seems that AMCON gave Arik Air extension of payment till July after yesterday’s meeting. The airline also risks losing its IATA-membership because of its indebtedness.

Update:

Both AMCON and Arik Air deny the reports of a takeover.

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2 responses to “AMCON ‘takes over’ Arik Air”

  1. Eze says :

    We all knew Arik was formed with illegitimate money & served first as a money laundering outlet before real airline operator. In any case, it has grown to become the largest Nigerian airline and must not be allowed to sink. Hence AMCON’s intervention can be a positive step if directed toward trimming the fat at Arik Air, getting rid of the bad apples, hiring a new competent management, and initiating some kind of dialogue for merger with either Air Nigeria or Aero. Consolidation 2.0? Why not. Economies of scale is the only way to compete for a true Nigerian flag carrier.

  2. Greg says :

    “…a true Nigerian flag carrier”….well said, brother !

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