News making round this morning confirms that the popular Silverbird offices in Lagos, Abuja and Porthacourt has been taken over by Asset Management Corporation of Nigeria (AMCON). This is due to an alleged N11 billion loan owed to AMCON by Silverbird Group which has remained unpaid for sometime.
We called our sources in AMCON to get a feel of what is going on what the implication is for owners of shops in Silverbird. This is what we were told.
- Decision came from Federal high court Abuja.
- Amcon has been appointed a receiver manager to run the place and make sure everything goes smoothly
- Assets taken over are all Silverbird assets in Lagos, PH and Abuja.
- Amcon anticipates that all shops will remain open
- AMCON source also informed us “we don’t takeover companies to kill them. The receiver manager was not appointed to close the place down.”
- Receiver manager may however rework contracts for expired tenants
- Amcon will isdue press statement by this afternoon.
Just in case you didn’t know, here is how AMCON functions;
AMCON is an institution formed to buy bad or non performing loans from commercial banks. It was setup amidst the financial crisis that ensued in 2010 which saw over half a dozen Nigerian banks taken over by the Central Bank of Nigeria. Since then, non-performing loans owed to banks are sold to AMCON at a discount providing badly needed liquidity for the banks to continue to be in business. So, if you owe a bank about N1 billion but have not been servicing the loans for over a year and don’t seem likely to service it within the timeframe agreed with the bank when the loan agreement was signed, the bank will feel compelled to sell that loan to AMCON at a discount. When AMCON buys the loan, it request that the obligor, in this case Silverbird, come to the table to negotiate new terms which often involve longer tenor, reduced interest rates and more often a change of management. If these terms are not fulfilled, such as non service of the loans or a material breach of contract signed, AMCON can get the courts to approve a takeover of the company.
