Nairametrics| Nigeria’s nationalised airline, Arik is said to owe creditors a whopping N387 billion. According to reports from Leadership, Arik Accumulated N387bn debt Before FG Took Over via AMCON.
How did they find out?
Leadership claimed that the figure was obtained in an official document filed by lawyers to AMCON to support an interlocutory injunction to restrain the shareholders and the directors of Arik Airlines from interfering with the current AMCON led management led by Capt. Roy Ukpebo Ilegbodu.
Here is a breakdown of who Arik allegedly owes this money
- Insurance policy – N418,893,067.97
- Pension remittance – N4,586,860,471.50
- Lufthansa Technik Group – €31,000,000.00 for
- Zenith Bank – N28,346,678,438.00
- Access Bank – N9,447,673,924.00
- Amadeus Marketing – N632,490,151.40
- Marriot and Best Western Hotels – N3,800,000.00
This above breakdown does not amount to N387 billion suggesting that the level of indebtedness may have been exaggerated or not exhaustive. It also excludes Arik’s assets which would have provided us with what its actual net current liabilities is.
Despite this, the N28.3 billion and N9.4 billion owed to Zenith Bank and Access Bank respectively should posse a huge source of concern to investors. It is unclear of either bank have made provisions for these loans in their 2016 FY results. It is also likely that some other banks may also be listed as creditors to Arik.
Zenith Bank’s exposure to the Transport sector (which includes airlines) was about N55.8 billion in 2016 with only N1 billion classified as non-performing. Access Bank on the other hand has a total exposure of N64.9 billion to the transportation and storage sectors.