Arik Air’s shareholders move to defray debts owed to AMCON

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Arik Air’s shareholders have held talks with a Middle East-based firm to partner with the airline to pay off the debts it (Arik) owes to Asset Management Corporation of Nigeria (AMCON) and the other creditors.

A source told News Gazette that that the airline’s shareholders had been holding series of meetings with other investors including the Asian conglomerate which considers Africa as a veritable place for investment.

The source said the company, which name is kept under wraps, had earmarked huge funds to investment in airline business, power and agriculture.

He said the Middle East firm was attracted to Arik Air because of its interest in aviation which it intends to use the airline and latch on to in a big way.

He said the negotiations began in London recently adding that that each of the companies had raised its own team to continue with the talks.

He also said Arik Air would send a strong representation, including Deloitte UK, Barclays Africa and a UK-based law firm, to the next round of talks.

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

“The company is willing to build maintenance, repair and overhaul (MRO) facility in Nigeria if government gives it the needed support because it (company) 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. They said 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,” said the source.

Arik Air’s chairman, Sir Joseph Arumemi-Ikhide who confirmed the development said the investor had started negotiation with the shareholders of the company.

It would be recalled that AMCON had stated that Arik Air owed it N263.7 billion, but the airline had argued saying its total debt exposure, including that of international creditors and local debts amounted to N160 billion, representing a 16.4 per cent of its value which Deloitte UK put at $3.2 billion.

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