…releases aircraft inventory
The Asset Management Corporation of Nigeria (AMCON) has reaffirmed its commitment to recovering debts owed by Arik Air Limited (in Receivership) and its founder, Sir Johnson Arumemi-Ikhide, totaling over ₦455 billion.
At a recent press briefing in Lagos, AMCON’s Head of Corporate Communications, Jude Nwauzor, stressed the prominence of media collaboration in ensuring accountability and supporting efforts to protect Nigeria’s economy from the ripple effects of unpaid obligations.
Arik Air alone owes ₦227.64 billion, while its affiliated companies, including Rockson Engineering and Ojemai Farms, owe ₦163.50 billion and ₦14.03 billion, respectively. These debts, acquired by AMCON as non-performing loans from financial institutions, have posed significant challenges to recovery despite restructuring attempts dating back to 2011.
Nwauzor debunked claims by Arumemi-Ikhide that the loans were performing and that AMCON’s receivership was unjustified, describing such statements as misleading and harmful to public understanding.
At the time of the receivership in February 2017, he established that Arik Air was found to be in severe financial distress. A KPMG report confirmed that the airline was balance-sheet insolvent, with liabilities exceeding ₦289 billion by December 2016.
Subsequent audits by PwC revealed that Arik Air had been technically insolvent since 2014, with liabilities consistently outweighing assets. The company faced dire operational issues, including grounded aircraft, unpaid salaries, canceled flights, and disputes with aviation regulators. The Federal Government, concerned about the airline’s collapse and its impact on 1,500 employees, called on AMCON to intervene, a move later affirmed by the Federal High Court in Lagos.
AMCON’s recently released inventory of Arik Air’s fleet at the time of the takeover reveals the magnitude of the challenges faced. Of the airline’s reported 30 aircraft, only nine were operational. Several planes had been abandoned in locations such as Norwich, Southend, Malta, Johannesburg, and France, while others had been extensively cannibalized for parts. In addition to these operational deficiencies, multiple aircraft were found to have been used as collateral for personal loans, further compounding the company’s woes.
Seven years after the receivership, AMCON, as noted by Nwauzor, has made strides in stabilizing Arik Air’s operations but still faces considerable challenges. The current fleet includes five operational aircraft, while others require extensive maintenance or are in long-term storage. Additionally, several planes have been repossessed by creditors, scrapped, or auctioned, highlighting the significant financial and logistical hurdles in recovering the airline’s fleet.
Despite these obstacles, AMCON remains steadfast in its recovery efforts. The agency has called for greater accountability from high-profile debtors like Sir Johnson, urging the media to hold such individuals responsible for repayment.
Nwauzor stressed that the refusal to settle debts is a disservice to Nigerians, adding that the burden of unresolved obligations should not fall on taxpayers.
AMCON reiterated its dedication to recovering over ₦227 billion owed by Arik Air and affiliated companies while working to restore confidence in Nigeria’s aviation sector. The Corporation also assured the public of its commitment to ensuring operational stability for Arik Air’s remaining fleet and safeguarding the welfare of its employees.
As AMCON continues its recovery efforts, it has appealed for public and private sector cooperation to protect Nigeria’s economic interests and prevent similar financial crises in the future. The Corporation emphasized that the journey to debt recovery and operational restoration might be long, but its resolve remains unshaken.
