The Asset Management Corporation of Nigeria (AMCON), yesterday revealed before the House of Representatives that its debt profile had risen to N6.6 trillion.
An ad-hoc committee of the House of Reps were told that the liabilities rose after AMCON bought banks’ bad loans worth N3.3 trillion and paid N1.7 trillion for the loans.
This was disclosed by the Director of Banking Operations, Central Bank of Nigeria (CBN), Mrs Tokunbo Martins, at the House of Representatives public hearing on the sale of banks by AMCON.
The House ad-hoc committee, headed by Albert Abiodun Adeogun, who is investigating the sale of banks by AMCON, had raised eyebrows at the rise in liabilities, particularly as AMCON owed the CBN N4.5 trillion.
The central bank said it was monitoring the liabilities of AMCON to ensure that it remained manageable prior to its winding down in 2024.
Chairman of the committee, Adeogun, queried the amount of liabilities, saying: “About two months ago, when we met, you said the liabilities of AMCON stood at N4.5 trillion; today you say it’s N6.6 trillion. What are the components of this liability? Who are your creditors?”
Director of Banking Operations, CBN, Tokunbo Martins, however, explained to the committee that while the debt to the CBN stood at N4.5 trillion, the N6.6 trillion included calculated interest which would have accrued to the debt by 2024.
“AMCON looks at its cash flow periodically… and the banks generate N250 billion annually to AMCON, they have assets that can pay off their liabilities and by 2024, when AMCON is expected to be wound down, the liabilities would have been extinguished,” she said.
She also revealed that the banks that were sold included Mainstreet Bank and Enterprise Bank, while noting that the process was transparent and that Skye Bank and Heritage Bank, which bought the banks, were not allowed to use money from depositors’ funds.
The lawmakers also queried why AMCON bought over Aero Contractors’ debts but did not extend the same gesture to Arik Air.
News continues after this ad
The Managing Director of AMCON, Mr. Ahmed Kuru,replied saying Aero Contractors showed weaknesses in corporate governance, adding that from 15 aircraft in January 2015, the number had dropped to three by the second quarter of that year.
Kuru explained, “If we did not intervene, there would be no airline called Aero by 2016; AMCON owns 60 per cent equity in Aero in addition to a debt of N12bn.
“So, we also needed to save our money. Arik is a good airline and they have not shown any weakness in what they are doing.”