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AMCON Takes Over Three More Arumemi-Ikhide’s Firms

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  • AMCON Takes Over Three More Arumemi-Ikhide’s Firms

The Asset Management Corporation of Nigeria has taken over Rockson Engineering Limited, Ojemai Investment Limited and Ojemai Farms, two firms linked to the former Chairman of Arik Air, Sir Joseph Arumemi-Ikhide.

According to the corporation, Rockson Engineering is indebted to it to the tune of N107bn; Ojemai Investment, N1.9bn; and Ojemai Farms, N8.6bn.

Arik Air’s total debt is also put at about N387bn.

The Head of Corporate Communications, AMCON, Mr. Jude Nwauzor, confirmed the takeover of the firms to one of our correspondents in Lagos on Wednesday.

In an affidavit deposed to by the Receiver Manager of Arik Air, Mr. Oluseye Opasanya, before a Federal High Court in Lagos, the airlines’s total indebtedness was put at N387bn.

According to the affidavit, in addition to about N375bn owed locally, the airline also owes aviation authorities in the West Coast of Africa about $6.5m and Lufthansa Technik Group about €31m.

A breakdown of Arik’s debt within the country showed that the airline owes N418m as arrears of unpaid insurance premium for its airplanes, due on February 10, 2017.

According to the document, a demand letter from the National Pension Commission also showed that the airline failed to remit pension contributions of its employees despite making the necessary deductions from their salaries, and so owes the commission the sum of N4.586bn.

Other debts by the airline are N28.364bn to Zenith Bank Plc; N9.447bn to Access Bank Plc; N632m to Amadeus Marketing Nigeria, an aviation service provider; and N3.8m to Marriot Hotel and Best Western Hotel for the accommodation of its engineers and members of staff.

It was also revealed that the erstwhile management of the airline obtained N2bn to retrofit from AMCON without documentation.

The affidavit alleged that the former management of Arik was basically gambling with the lives of millions of people that patronised the airline, because it did not care about safety as critical issues such as having a simulator to ensure that Arik pilots undertook mandatory training as required to improve their efficiency, were non-existent.

It added that the airline had inadequate equipment to facilitate its operations, which was reflected by the insufficient laptops available at its check-in counters to conduct basic checks.

Nwauzor stated, “The airline uses a minimum of 48 tyres every month, but when AMCON took over, there were no spares.

“As a matter of fact, the salaries of the expatriate and local staff of Arik were unpaid, while the airline owed premiums on its insurance policy because the previous management of Arik took insurance on a monthly basis instead of annually in accordance with aviation global best practices for the insurance of aviation assets.

“Arik operations would have been grounded indefinitely if AMCON did not intervene as the insurance policy of Arik was to lapse on February 10, 2017. As of that date, Arik owed a total of N418m in arrears of unpaid premium, just as its employees’ health insurance had also expired and as a result, the pilots and other members of staff of the airline were to halt operations as well.”

He added that AMCON took over to underscore the government’s decision to instil sanity in the nation’s aviation sector and prevent a major catastrophe, adding that it underestimated the rot in the airline’s system before the takeover.

According to him, the government has so far spent about N1.5bn since AMCON took over in February to revive the airline, which he said was on the verge of shutting down.

“Even if we had given the former management the next 25 years, they will still not have been able to get out of debt. The National Assembly wanted AMCON to move in, liquidate the company and recover the debts owed. That option is still open to us,” Nwauzor added.

The court document stated that among other shortcomings, Arik operated without any pattern of corporate governance, had a very poor business judgment, poor record keeping and lacked proper accounting and auditing.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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