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Arik Boss’ Firms Owe us N263.7bn, Says AMCON



  • Arik Boss’ Firms Owe us N263.7bn, Says AMCON

The Asset Management Corporation of Nigeria on Wednesday said Arik Air and the other firms belonging to its principal promoter, Johnson Arumemi-Ikhide, was indebted to it to the tune of N263.7bn.

This is apart from the different amounts owed other creditors and members of staff in the form of salary arrears.

The development, AMCON stated at an appearance before the Senate, made the takeover of the airline inevitable.

AMCON’s management team, who appeared before the Senate Committee on Banking, Insurance and other Financial Institutions in Abuja on Wednesday, alleged that Arik Air broke several business rules and agreements before the takeover.

The Managing Director, AMCON, Mr. Ahmed Kuru, in his presentation, described Arik as a serial delinquent debtor.

He said, “Currently, based on the analysis and the reports that we received from outside, Arik Air is confronted with some of these challenges: they have consistently defaulted in servicing all their loans; they have consistently defaulted in making all the lease payments; they have consistently defaulted in paying even insurance premium; they have failed to meet other service providers’ obligations.

“There is total lack of accountability, because nobody knows what is happening there financial-wise. And they have also accumulated regulatory debts, some of which we couldn’t verify before, but which we now know to be N26.4bn, including $3.3m. These are debts to the NCAA, FAAN, NAMA, etc.”

The AMCON boss also identified poor corporate governance as a major cause of crisis in Arik, as decisions were taken solely by the owner.

“And they have failed to even pay staff salaries. They are owing salaries for periods ranging between five and seven months, depending on the department,” he added.

Kuru stated that despite Arik’s refusal to pay its debts, the airline was making an estimated revenue of N7bn monthly.

“In spite of all the efforts extended to Arik, given its strategic nature in the industry, it either refused or neglected the terms of settlements,” Kuru told the lawmakers.

The Chairman of the committee, Senator Rafiu Ibrahim, in his opening remarks, said the lawmakers were in support of AMCON’s activities.

He said, “I would like to put it on record that from the inception of the eighth Senate, we have made it clear to the nation that we are in a total support of the management team of AMCON, because we saw the huge responsibility on its table.

“I am reiterating that we are in support and that whatever you do within the ambit of the law, not infringing on the fundamental human rights of any citizen of Nigeria, you have the support of the Senate.”

The lawmaker, however, said the Senate wanted to know what led to the final decision by AMCON and the corporation’s plan for Arik.

In his response, Kuru explained that in line with its statutory mandate, AMCON bought Arik Air’s non-performing loans from Union Bank of Nigeria Plc (N71bn) and Keystone Bank Limited (N14bn), with the transaction with the latter originated by the defunct Bank PHB.

He said the facilities were granted to Arik for the purchase of additional aircraft and to refinance existing term loans, adding, “The default in repayment posed systemic threat to the banks and, indeed, the Nigerian economy.”

Kuru further said, “The principal promoter of Arik Air is Sir Johnson Arumemi-Ikhide. Apart from AMCON, Arik is also currently indebted to other commercial institutions in Nigeria, including Standard Chartered Bank, Zenith Bank, Ecobank and Access Bank to the tune of circa N165bn; N26bn is owed to the federal aviation agencies and regulators; $11m is owed to European aviation agencies and service providers; and $20m owed to Lufthansa Technique.

“AMCON also acquired three other non-performing loans of companies in which the principal promoter is Sir Johnson Arumemi-Ikhide, namely: Rockson Engineering (N107bn), Ojemai Farms Limited (N8.6bn) and Ojemai Investment Limited (N1.9bn). The total exposure of Sir Arumemi-Ikhide to AMCON is N263.7bn.”

The AMCOM boss recalled that the corporation, in September 2011, restructured Arik’s debt from N85bn to N70bn as a nine-year-term loan running at 12 per cent interest per annum.

“Unfortunately, the proprietor of the business failed to meet all the restructuring agreements,” he added.

Other terms of the restructuring, Kuru said, included that AMCON should appoint a resident monitoring manager who would have the authority to call for any of Arik’s records for examination. Arik was also to provide three-year records of its remittances to the Federal Airports Authority of Nigeria.

Kuru stated, “Arik defaulted on the terms of the restructuring and failed to make the monthly repayment as agreed.

“In May 2013, AMCON sourced N26bn of the Central Bank of Nigeria’s Power and Aviation Intervention Fund through the Bank of Industry on behalf of Arik. AMCON disbursed N21.38bn of the BoI loan to Arik as working capital. Out of this amount, N2.4bn was meant for the reconfiguration of two aircraft from passenger to cargo carriers. This was never done as the funds were diverted by the Arik management and is now the subject of EFCC investigation. Both aircraft were abandoned in the UK.”

Kuru further explained that due to accrued interest and unpaid principal, a second restructuring was proposed for Arik’s debt to reduce it from N138bn to N90bn in December 2015. He, however, noted that the proposal was still awaiting the CBN approval.

According to him, the proposal was made based on Arik’s plan to do a private placement and subsequently do an Initial Public Offering within a period of six months.

Kuru said, “Based on that, they were expecting N44bn from Afrexim as a bridge. None of this happened as Arik could not comply with any of the conditions given to them. In spite of the leniency and good faith demonstrated by AMCON throughout the negotiations, Arik refused or neglected to adhere to the terms of settlement.

“AMCON continued to bear the burden of repaying the BoI loan at one per cent interest rate without any corresponding commitment from Arik. So far, AMCON has paid N9.05bn on behalf of Arik.”

Kuru put the total recoveries from Arik to date at N4.6bn, which he said, was only 3.2 per cent of current exposure to AMCON. He stressed that the total repayment by Arik in last 18 months was “N50m only.”

Kuru said as of December 2016, Arik’s debt to AMCON stood at N146bn. This, he said, was “due to mounting interests and unpaid principal.” He added that the consolidated exposure of debtor companies in which Arumemi-Ikhide was the principal promoter stood at N263.7bn.

“This figure excludes Arik’s indebtedness to other banks, aviation authorities (local and foreign), vendors, contractors and workers,” the AMCON boss stated.

Kuru disclosed that Ethiopian Airline was invited to manage Arik Air under a management contract but the airline backed out from the deal when it got the true profile of Arik.

After Kuru’s presentation, Ibrahim pointed out that AMCON’s takeover of Arik was belated.

At a sitting of the House of Representatives Committee on Aviation , AMCON said Arik would have collapsed in another eight weeks had the corporation not moved in to take over the airline from its former owners.

Kuru said AMCON was alarmed that Arik did not have a management structure other than that it was run as a one-man business.

He explained, “Nobody can give you a financial statement, there are no accounts and it became very urgent to engage KPMG to carry out an audit.”

He said, “Public confidence in Arik was diminishing and there was the constant fear that Arik Air aircraft could be seized at any location due to mounting debts. The Federal Government felt that Arik is more than just a business, but an airline of strategic importance to Nigeria.

“So, the government decided that AMCON should intervene by appointing a recovery manager. If the intervention did not take place, the airline would not have survived for another eight weeks.”

When the lawmakers sought the views of Arik’s new Chief Executive Officer, Mr. Roy Ilegbodu, he corroborated the submissions of Kuru.

He told the committee that in his 40 years of working in the aviation industry, he had yet to see an airline “badly run as Arik.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


Onyeama: Qatar To Invest $5bn In Nigeria’s Economy



The oil-rich state of Qatar is to invest a total of $5 billion in Nigeria’s economy, the Foreign Affairs Minister, Godfrey Onyeama, has disclosed.

Onyeama, who spoke Sunday at a send forth dinner in honour of Nigeria’s Ambassador-designate to the State of Qatar, who is also the outgoing Director of Protocol (DOP) at the State House, Ambassador Yakubu Ahmed, also stated that recent career ambassadorial appointments made by the gederal government was based on merit, experience and professionalism.

The minister further said there had been discussions with Qatar on partnership with Nigeria’s Sovereign Wealth Fund (SWF), for significant investments in the region of $5 billion in the Nigerian economy.

According to him, ‘‘Qatar is a weighty and strategic country and very strategic in that part of the world and we are putting our best feet forward to advance the interest of our country economically and in other areas.”

He recalled that President Muhammadu Buhari had visited the State of Qatar in 2016 and the Emir of Qatar, Tamim Bin Hammad Al-Thani, reciprocated with a State visit in 2019.

Onyeama also explained that only trusted hands with a track record of diligence, experience and professionalism in the Foreign Service were recently appointed career ambassadors by the federal government.

The minister said the appointment of Ahmed and other career ambassadors were predicated on posting dedicated and keen Foreign Service practitioners to serve as image makers of the country.

He said: ‘‘Ambassador Yakubu Ahmed is a dedicated professional with a penchant for rigour and detail. He is very capable and one of the best in the Ministry of Foreign Affairs. He is personable, affable, extremely friendly, dispassionate and objective.

‘‘He is going to head a very important mission, a very important country, reckoned to be one of the richest countries in the world, per capita, and there’s a lot we will be doing with the State of Qatar.”

Also speaking, the Deputy Chief of Staff, Adeola Rahman Ipaye, described the honoree as a ‘‘perfect gentleman, very even-natured and always well turned out’’.

Ipaye said he had no doubt that the newly appointed ambassador would serve the country well in Qatar, adding that: ‘‘We are further encouraged that when he completes this assignment, he would return to serve Nigeria in a higher capacity.’’

In his remarks, the Permanent Secretary, State House, Tijjani Umar, while congratulating the outgoing DOP on his appointment, lauded Ahmed for excellent service to the State House and the nation.

‘‘He served this institution and the nation with the deepest sense of responsibility and it is very important that we establish a tradition where the system appreciates those who have served it well and those who will continue to serve it well,’’ he said.

Umar urged the new envoy to keep very fond memories of his time at the Presidential Villa, assuring him of the prayers and goodwill of all the staff.

Responding, Ahmed thanked President Buhari for the great honour and privilege of making him his principal representative in Doha, Qatar.

The Ambassador-designate pledged to deplore his energy and skill to the promotion of the existing cordial relationship between Nigeria and Qatar, particularly in the areas of economic, political, cultural and consular affairs as well as other key areas.

Ahmed, who joined Nigeria’s Foreign Service in 1993, said during his years in public service he had learnt that ‘‘patriotism, selfless service, diligence, determination and perseverance will always result in the achievement of the desired objective’’.

According to him, these virtues would be his ‘‘watchword’’ in the pursuit of Nigeria’s foreign policy objectives and the attainment of national interests.

The Ambassador-designate singled out for appreciation the Chief of Staff to the President, Prof. Ibrahim Gambari, and the state Chief of Protocol, Ambassador Lawal Kazaure, saying he had learnt a lot working under their mentorship.

He expressed gratitude to the Minister of Foreign Affairs and the Permanent Secretary, State House for giving him the opportunity of a memorable work experience in the State House.

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France, Nigeria to Build New Partnership



France is currently aiming at building a new partnership with Nigeria, with the dispatching of its Minister in charge of Foreign Trade and Attractiveness, Franck Riester, to Nigeria.

Riester, who was expected at the time of filing this report on Monday, is scheduled to visit Nigeria from 12-14 April, 2021.

A statement from the French Embassy in Nigeria said: “Franck Riester is visiting Nigeria from 12 to 14 April, a visit that follows up on the priorities set by French President Emmanuel Macron during his official visit to Nigeria in July 2018 and his desire to build a new partnership between Africa and France.

“As the largest economy in Africa and the economic engine of West Africa, Nigeria is indeed a major partner for France, the first in sub-Saharan Africa with bilateral trade amounting to a total of 4.5 billion USD in 2019 (2.3 billion USD in 2020, due to the Covid-19 pandemic).”

It disclosed that the minister will have several official meetings in Abuja and Lagos, in order to underline the importance of the bilateral economic relationship and to prepare the summit on the financing of African economies in Paris on 18 May.

It revealed that the objective of the mission is also to further strengthen the links between the French and Nigerian private sectors, and “in this regard, the minister will have in-depth discussions with the main Nigerian economic actors to strengthen bilateral cooperation and investments, both in Nigeria and in France, particularly in the logistics sector”.

It said while in the country, the minister would meet with young Nigerian entrepreneurs in the cultural and creative industries sector, to discuss the major role of their country in African creativity and the development of the African entrepreneurial ecosystem, with the support of France.

It further said: “The minister will also open the ‘Choose Africa’ conference, a €3.5 billion initiative by President Emmanuel Macron dedicated to supporting the development of start-ups and SMEs in Africa to enable the continent to benefit fully from the opportunities of the digital revolution.”

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COVID-19: USAID to Provide $3m Grant, Technical Assistance to Combat Food Insecurity in Nigeria



The United States Agency for International Development (USAID) is providing financial grant and technical assistance worth $3 million to combat food insecurity in Nigeria compounded by COVID-19 pandemic.

A statement by the agency on Monday said: “On April 12, 2021, the U.S. Agency for International Development (USAID) in Nigeria launched a COVID-19 Food Security Challenge that will provide $3 million in grant funding and technical assistance to youth-led and mid-stage companies working in food value chains in Nigeria.”

The statement lamented that Nigeria is experiencing food insecurity compounded by the COVID-19 global pandemic and its effects on the food value chain in the country.

It stated that the pandemic has disrupted the already fragile agricultural value chains, especially smallholder farmers’ ability to produce, process and distribute food, which has disrupted agricultural productivity and markets, and negatively impacted livelihoods, especially among vulnerable households, women and youth.

The USAID Mission Director, Anne Patterson, said: “We are launching the COVID-19 Food Security Challenge to help innovative Nigerians alleviate food insecurity.

“This assistance encourages private sector-led solutions to boost food production, processing and create market linkage along the agriculture value chain in a sustainable way across Nigeria.”

The statement revealed that in launching the challenge, USAID seeks commercially viable youth-led and mid-stage companies already working in food production, processing, and distribution, noting that successful applicants will present ideas that demonstrably help farmers and other stakeholders in the agricultural value chain increase, agricultural productivity and food security within the next six months.

According to the statement, the challenge will award 15 to 25 youth-led companies up to $75,000 each and award 10 to 15 mid-stage companies up to $150,000 each.

Winners will receive funding and technical assistance to rapidly expand their activities to mitigate the effect of COVID-19 on Nigeria’s food value chain and improve the resilience of vulnerable households to the negative impacts of the pandemic.

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