ASSET Management Corporation of Nigeria (Amcon) officials are close to sealing an ambitious plan to launch a new national carrier using the aircraft of the debt-ridden airlines Arik Air and Aero Contractors which it is currently managing.
To be named Nigeria Eagle, the new international airline, may take to the sky with at least 10 planes as early as June. Amcon, the federal government-owned bad debt manager which owns controlling stakes in both Arik and Aero, chose to establish the new airline as a clever means of wriggling out of the multibillion naira liabilities currently hanging over the two carriers.
Heavy debts are believed to be hindering new buyers from showing interest in the two carriers, frustrating Amcon’s plans to sell them to investors. Established by Nigeria’s federal government in 2010, Amcon was originally charged with buying over bad debts from commercial banks in order to save the banking system from imminent collapse.
Amcon now has a mandate to recover bank loans from several companies whose bad debts are so high they can no longer function. Amcon took over the management of Arik and Aero Contractors a few years ago following the two carriers’ inability to continue servicing their debts running into several billions of naira.
Amcon had apparently made failed attempts to sell the two airlines due to their huge liabilities and likely litigation from the original owners. With that plan failing, Amcon is hoping that by pooling the assets of the two airlines, especially their planes, it will be able to recover its investment in the two carriers ahead of its winding down in 2023.
One Amcon official said: “We are not trying to merge Arik and Aero. We are trying to strategically assemble all our aviation portfolios under one umbrella. The challenge of selling Aero is humongous and the challenge of Arik is even double.
“Our interest is not in the branding level, it is in our portfolio. The money we invested over the years to protect these airlines.
“When you hear of a debt profile of close to N300bn, it is very scary. If you assemble all your assets under a fresh umbrella, dealing with the thing will be easy, which is what management is trying to do.”
According to aviation industry sources, Amcon has gone as far as taking 80% of the steps it needs to take towards setting up the carrier. However, there are concerns in the aviation industry that the original owners of Arik and Aero may take Amcon to court over the current move.