AMCON Explains Why It Took Over Arik Air

AMCON management has explained that it took over Arik Air because the airline was owing it N146 billion.

The Managing Director of Assets Management Corporation of Nigeria (AMCON), Mr Ahmed Kuru, said the corporation took over Arik because the airline was owing it N146 billion.He made this known at a meeting with the Senate Committee on Banking, Insurance and other Financial Institutions on Wednesday in Abuja.The News Agency of Nigeria (NAN) recalls that AMCON took over the management of Arik on Feb. 9.Kuru said that the N146 billion owed the corporation was part of a total of N352.5 billion debt profile of the airline.He stated that non-performing loans of Arik were acquired in 2011 from two banks in line with AMCON’s statutory mandate and listed the banks as Union Bank which was owed N71 billion and Keystone, N14 billion.According to him, the facilities were granted to Arik Air for purchase of additional aircraft and to refinance existing loans and the default in repayment posed systemic threat to the banks and economy.The managing director said that Arik was also indebted to Standard Chartered Bank, Zenith Bank, Ecobank and Access Bank to the tune of N165 billion, adding that there were huge foreign components of the airline’s debt.The AMCON boss said in spite of the leniency and good faith demonstrated by AMCON throughout the negotiations, Arik refused to adhere to the terms of settlement of some of the debts.He added that AMCON continued to bear the burden of repaying some of the debts, including that of Bank of Industry, which was at one per cent interest rate.