The Asset Management Corporation of Nigeria (AMCON) has reaffirmed its commitment to recovering the N227 billion debt owed by Arik Air, as the agency intensifies efforts to liquidate the airline.
This disclosure was made by AMCON’s Head of Corporate Communications, Mr. Jude Nwauzor, during an interactive session with aviation correspondents in Lagos on Friday, as reported by the News Agency of Nigeria (NAN).
Nwauzor stated that despite numerous attempts to revive Arik Air, the airline’s financial situation has remained dire, prompting AMCON to proceed with its liquidation plans.
The debt, which remains a significant financial burden, is part of a broader issue concerning several companies under the ownership of Sir Johnson Arumemi-Ikhide, including Rockson Engineering and Ojemai Farms. AMCON’s determination to recover these debts is underpinned by Sections 6 and 48 of the AMCON Act, which empowers the corporation to take such actions.
“Nwauzor added that Arik Air owed AMCON N227.63 billion, while Rockson Engineering owed it N163.50 billion and Ojemai Farms, N14 billion.
“He emphasised that AMCON was determined to recover the debts,” the NAN report read in part.
More insight
The NAN statement highlighted that AMCON’s strategy is centered on recovering a total of N455.17 billion in non-performing loans owed by companies in which Sir Johnson Arumemi-Ikhide has interests. These debts were transferred from various banks to AMCON due to the companies’ failure to meet repayment obligations.
- According to Nwauzor, Union Bank of Nigeria was the first to classify Arik Air’s loans as non-performing, in line with the Prudential Guidelines set by the Central Bank of Nigeria. As of December 31, 2024, the outstanding debt owed by Arik Air alone amounted to N227.63 billion.
- The financial troubles deepened when Arik Air’s loan exposure reached N70 billion in 2010, a situation that played a major role in Union Bank’s own financial instability.
- Nwauzor further revealed that at the time AMCON took control of the airline, only nine of Arik Air’s aircraft were serviceable, reflecting the dire state of the airline’s operations.
What you should know
Beyond Arik Air’s ongoing troubles with AMCON, a Federal High Court in Lagos recently ruled that Export Development Canada (EDC) can repossess an aircraft leased to Arik Air, marking the first application of the Cape Town Convention in Nigeria.
- The ruling, issued on November 27, 2024, by Justice Alexander Oluseyi Owoeye, follows the introduction of Nigeria’s Federal High Court (Cape Town Convention and Aircraft Protocol) Practice Direction in September 2024, which mandates the application of the convention’s provisions in relevant cases.
- The court granted EDC the right to reclaim and dismantle the grounded CRJ1000 aircraft, leased to Arik Air in 2014. The ruling also barred EFCC officials from interfering with the repossession process.
The aircraft had been out of service since 2019, and efforts to repossess it had been blocked by the EFCC. The court’s decision clears the path for EDC to enforce its rights, marking a milestone in the enforcement of international aviation laws in Nigeria.
