The Nation reports;
The Asset Management Corporation of Nigeria (AMCON) has declared a loss of N822.9 billion for the year ended December 2012 (2011: N2.3tr). AMCON’s Managing Director/CEO Mustafa Chike-Obi, who broke the news yesterday at a media briefing in Lagos, attributed the loss to provisions made for impaired assets and discount on bonds issued to finance its operations.
The corporation’s total outstanding debt stands at N5.7 trillion, out of which N3.6 trillion is held as bond by the Central Bank of Nigeria (CBN). About N1.7 trillion of the bonds would be redeemed by December 31, 2013.
Chike-Obi said all holders of the bonds were expected by November 19, to indicate whether they would accept cash or Treasury-Bills in place of the bonds, on maturity. “The choice will be made on November 19 for bond holders to decide whether to take cash, or T-bills,” he said.
The AMCON boss said the classification of the loss showed that the Corporation spent N544.8 billion to purchase non-performing loans (NPLs) from banks. The balance of N278.1 billion was used on recapitalisation of banks.
Chike-Obi explained that the losses are expected to be defrayed through recoveries from its assets, with additional cover provided by the Banking Sector Resolution Cost Fund (Sinking Fund) provided by the Central Bank of Nigeria (CBN) and deposit money banks (DMBs). He put the value of the Sinking Fund warehoused at the CBN at over N500 billion.
Source: The Nation