The Asset Management Corporation of Nigeria (AMCON) has announced that Arik Air and Aero Contractors might be merged and turned into a national carrier because of the huge debts they owe.
AMCON’s Managing Director/Chief Executive Officer, Gbenga Alade, shared this information during a meeting with media executives in Lagos on Monday.
He explained that both airlines have accumulated so much debt that they might not be able to repay it.
Alade mentioned that the idea of merging Arik and Aero Contractors into a national carrier was proposed to a former aviation minister, but the suggestion was not accepted.
He said,“The former management of AMCON presented the idea of converting Arik and Aero to a national carrier.
But the former aviation minister did not buy the idea. We will present it again because that is the best option.”
He further explained that a special purpose vehicle (SPV) was created by the previous AMCON management to facilitate the conversion of these airlines into a national carrier, but it was sold off.
However, he believes they can create another SPV for this purpose.
“Unfortunately, the special purpose vehicle that was created by the former management of AMCON for the conversion of Arik and Aero to a national carrier had been sold. But we can create another SPV for this,” he said.
Alade expressed his concern over the current state of Arik and Aero Contractors, saying that the situation has been causing him significant stress.
Believe me, it is a very difficult problem to resolve, and it is giving me sleepless nights, particularly Arik. Arik is owing so much that they cannot pay,” he stated.
He also discussed possible solutions, noting that they have engaged with Arik’s major international creditors, including Afreximbank, to find a way out.
Arik owes Afreximbank around $52 million, but after negotiations, the airline was only willing to pay $8.5 million of that amount.
“However, where will that $8.5m come from? Where? AMCON doesn’t have money of its own to put there,” he said.
Alade explained that during the negotiations, there was a suggestion to take away some of Arik’s engines as a final settlement of the debt.
However, he was against this idea because it would cripple the airline. “And the truth is that, if they took those engines away, Arik is finished.
But we said ‘no, we cannot allow you to take it away. Let AMCON give you a kind of bank guarantee,” he stated.
Alade concluded by saying that AMCON is working hard to keep Arik operational, with a goal to have three planes flying now and hopefully seven planes by February next year.
“We will stretch it so that three planes are flying now and by the Lord’s grace, by February next year, we want to make seven planes fly for Arik,” he added.
Recall that the Federal Government has lifted the suspension on Arik Air’s operations on August 8, a week after its planes were grounded due to a dispute with Atlas Petroleum.
