The Asset Management Corporation of Nigeria (AMCON) is considering merging Arik Air and Aero Contractors to transform them into a national carrier.
This potential move was revealed by AMCON Managing Director/CEO Gbenga Alade during a media session in Lagos on Monday.
Alade explained that the merger is being considered due to the substantial debts of both airlines, which they might struggle to repay.
He noted that AMCON had previously proposed the conversion plan to the former Minister of Aviation, but it was not approved.
“The former management of AMCON proposed converting Arik and Aero into a national carrier, but the former aviation minister did not support the idea. We will present it again because it remains the best option,” Alade stated.
Alade also revealed that the special purpose vehicle (SPV) initially created for this purpose had been sold, but AMCON is open to establishing a new SPV.
This development follows the contentious launch of Nigeria Air by former Aviation Minister Hadi Sirika just before the end of former President Muhammadu Buhari’s administration.
The launch raised concerns about the ownership structure, which allocated a 49% equity stake to Ethiopian Airlines, leaving the Federal Government with 5% and three Nigerian investors with 46%.
In June 2023, the House of Representatives called for the suspension of Nigeria Air’s operations over fraud concerns, and in August 2023, current Aviation Minister Festus Keyamo announced the suspension of the national carrier project.
Alade expressed concern over the financial difficulties of Arik and Aero Contractors, particularly Arik Air, which owes about $52 million to Afreximbank. Despite negotiations, Arik has only been able to offer $8.5 million in settlement.
He also addressed the recent grounding of Arik Air’s aircraft due to a court order by billionaire Arthur Eze, stemming from an unpaid $2.5 million debt.
AMCON had taken over Aero Contractors in 2016 and Arik Air in 2017 due to their financial troubles.
Since then, AMCON has been working to recover debts and revive assets across 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 success in recovering approximately N100 billion from high-profile debtors.
He also discussed ongoing efforts to address issues in the oil, gas, and power sectors, which could significantly boost Nigeria’s economy, create jobs, and improve the business environment.
