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Arik Air New Investors Set to Offset AMCON Debts

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chike onwuegbuchi

Indications have emerged that owners of Arik Air, currently under receivership, have concluded arrangement and got a firm commitment from a major investor from the Middle East to partner with them to offset the debts the airline owed Asset Management Corporation of Nigeria (AMCON) and other creditors.

This negotiation was confirmed by the Chairman of Arik Air, Sir Joseph Arumemi-Ikhide .

According to one of the owners, who spoke under condition of anonymity, “the airline shareholders have held series of meetings with other investors but has reached firm commitment with this Middle East-based conglomerate, which has its headquarters in Dubai with interest to do business in Africa”.

He said the company “ had voted funds to investment in airline business, power and agriculture and it was attracted to Arik Air, which would serve as platform to invest in air transport in the continent, as the continent has been projected as new bastion of hope for economic development in the world”.

The shareholder further said “ Arik Air and the company started negotiation last week in London and have reached some commitments and a team has been selected by each company to continue with the negotiations, which continues this month”.

“The plank of discussion is on the shareholding and the depth of the debts, which creditors must back with evidence, and also operational conditions”.

Meanwhile, the negotiation was confirmed by the Chairman of Arik Air, Sir Joseph Arumemi-Ikhide. Arumemi-Ikhide who was on a medical trip to London, said the investor has started negotiation with the shareholders of the company and so far both parties had had fruitful discussions as negotiation continues. There are also indications that concerned government officials are aware of the meeting between Arik and the investor.

Another source also disclosed that the “new investing company is willing to build maintenance, repair and overhaul (MRO) facility in Nigeria if government gives it the needed support because it has voted funds to invest in Africa”.

“We have been having discussions with investors and 10 days ago we had discussion with a US-based company, but we are having serious discussion now with this organisation, which is based in the Middle East because they have a package to invest in Africa and take advantage of the growing economy in the region. We have reached agreement on what I will call the sub-heads but the details will come out in our next discussion, but so far the discussion has been fruitful”.

“They are interested in expanding our operations and will give us additional airplanes in addition to the six we ordered from Boeing; so we have to expand our operations throughout Africa and other international destinations with their partnership. They are eager to invest in Nigeria but, of course, with the support of the Nigerian government and they said that government support is crucial because you cannot really succeed in airline business without government’s support and that is necessary for them to invest in Nigeria or they will take their funds to another African country,” the source said.

The informed source further said that Arik Air shareholders are putting a strong team for the next round of discussion, including Deloitte UK, Barclays Africa and UK-based law firm.

Recall that AMCON had maintained that Arik Air owed it N263.7 billion, but the former management of the airline had argued that its total debt exposure,

“including that of international creditors and local debts amounted to N160 billion, which represents a 16.4 percent of its value put at $3.2 billion by Deloitte UK in 2013”.

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