The Asset Management Corporation of Nigeria (AMCON) has indicated that Arik Air and Aero Contractors could be merged and converted into a national carrier.
During an interactive session with media executives in Lagos on Monday, AMCON’s Managing Director/Chief Executive Officer, Gbenga Alade, revealed the possibility of the merger due to the substantial debts owed by both airlines, which they may not be able to repay.
Alade explained that AMCON had previously proposed the conversion plan to the former Minister of Aviation, but the idea was rejected.
“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,” Alade stated.
He further disclosed that the special purpose vehicle (SPV) created by the former AMCON management for this conversion had been sold, but another SPV could be established.
This development follows the controversial launch of Nigeria Air by the former Minister of Aviation, Hadi Sirika, just days before the end of former President Muhammadu Buhari’s administration.
The launch raised concerns among stakeholders regarding the ownership structure, which granted Ethiopian Airlines a 49% equity stake, leaving the Federal Government with 5% and a consortium of three Nigerian investors with 46%.
In June 2023, the House of Representatives called for the suspension of Nigeria Air’s operations, citing concerns of fraud.
Subsequently, in August 2023, the current Minister of Aviation, Festus Keyamo, announced the suspension of the national carrier project.
During the briefing, Alade expressed concern over the financial state of Arik and Aero Contractors, which has been causing him “sleepless nights,” particularly in the case of Arik Air.
He noted that Arik owes about $52 million to Afreximbank, and despite negotiations, the airline has only been able to offer $8.5 million in settlement.
Alade also addressed the recent grounding of Arik Air’s aircraft by the Nigerian Airspace Management Agency due to a court order filed by billionaire businessman Arthur Eze, over an unpaid $2.5 million debt by Arik’s founder, Johnson Arumemi-Ikhide.
AMCON had taken over the management of Aero Contractors in 2016 and Arik Air in 2017 due to their inability to meet debt obligations.
The corporation has since been working to recover debts and revive assets in various sectors, including oil, gas, power, and telecommunications.
Alade announced plans to engage international asset tracers to recover assets hidden offshore by debtors and highlighted AMCON’s recent successes in recovering approximately N100 billion from high-profile debtors.
He also mentioned ongoing efforts to resolve issues in the oil, gas, and power sectors, which could significantly boost Nigeria’s economy, create jobs, and improve the business environment.
