AMCON injects N40bn into Arik Air, Aero, ailing firms

[Edoman]

As part of the Federal Government’s efforts to revive the country’s aviation sector, the Asset Management Corporation of Nigeria (AMCON) has injected about N40 billion into Arik Air, Aero and other ailing companies in the sector.
AMCON’s Managing Director/Chief Executive Officer, Ahmed Kuru, disclosed this while presenting a paper at the 6th Nigeria Transport Awards and Lecture which held in Lagos last week. Kuru, who was represented at the event by Mr. Kamilu Omokide, a Senior Vice President at AMCON, however, noted that despite the investment of N40 billion “on very good terms”, prospects for the sector the situation still looked bleak, which compelled AMCON to appoint Receiver Managers for some of the companies, including Arik and Aero airlines. The AMCON boss, whose paper was entitled:
“AMCON’s intervention in Transport and Allied Sector; Achievements, Challenges and Prospects,” called on agencies that are saddled with the responsibility of regulating critical sectors of the economy such as aviation, to adopt the same template which the Central Bank of Nigeria (CBN) used in regulating the banking industry. Explaining the proposed template, the AMCON boss said such approach will ensure stiffer corporate governance in the business of aviation and other allied critical sectors; minimize risks, as well as ensure that the experiences, which necessitated AMCON intervention in Arik and Aero, will not recur.

He argued that the corporation’s huge debt would have been avoided if the affected companies had proper corporate governance structures that enabled them to take effective business decisions.
According to him, with many failed entities as a result of poor decisions that led to huge Non-Performing Loans (NPLs), the government had no choice, but to create AMCON in 2010 to mop-up the bad loans, thereby stabilising and revitalising the Nigerian economy. He stated that in order to effectively carry out its mandate, AMCON purchased NPLs of about N181 billion from various banks, adding that 90 per cent of the loans purchased was in the aviation sector.

https://newtelegraphonline.com/2018/04/a...ing-firms/