From Uche Usim, Abuja
A group of local investors with stakes in Arik Air has appealed to President Muhammadu Buhari to return the airline to the former owners, as the basis for its take over by the Asset Management Company of Nigeria (AMCON), over purported N300 billion debt was illegal and ill-advised.
AMCON took over the airline, which hitherto accounted for 55% of the Nigerian aviation market in 2017, over alleged debt that fractured its operations and exposed it to a possible catastrophe.
The airline is now managed by Roy Ukpebo Ilegbodu, an aviation expert, under the receivership of Oluseye Opasanya, a senior advocate of Nigeria (SAN).
However, the Arik Air investors at a media briefing in Abuja on Wednesday lamented that investments in the airline by foreign partners have ceased since the AMCON takeover.
In a letter to the President Muhammadu Buhari dated October 26, 2020, the investors urged the government to return the airline to its owners to portray Nigeria in a good light on the global business stage.
Speaking on their behalf, Gen. Abdul-Rauf Tijani (retd.), argued that the funds used to set up the airline were offshore loans which local banks only provided some form of guarantee in line with rules of foreign borrowing.
He said: “Taking over Arik Air is unlawful. The Nigerian banks you’re trying to protect didn’t give the loan used to set up Arik Air. Arik Air got $5 billion loan to start up over 10 years ago. No Nigerian bank could afford such an amount of money. So, they were just guarantors. Arik has paid the loan back.
“Zenith Bank had no such money when Arik got the $5billion. So, where then is the authority to take over Arik Air? The money of Arik since the takeover, who is the custodian? Where is the annual report and account of the airline? AMCON is not the owner of Arik.
“In 2012-2013, Arik was valued by offshore valuers at $2.3 billion and in 2017, it was $6 billion. AMCON now came to take over the airline with 1,800 workers. Today, how many staff are left”, he queried.
According to him, the recent retrenchment of 300 employees of Arik was attributable to the continued lack of investments in the carrier since it was taken over by AMCON.
In their letter of appeal to the President, the investors urged Buhari to intervene in the takeover of Arik by AMCON.
The letter read in part, “We hereby appeal to Your Excellency to intervene on AMCON takeover of Arik Ltd. This takeover occurred on February 9th 2017.
“Ever since, we have approached many foreign investors all of whom have been reluctant to invest in the company because of the perceived hostile and uncertain investment climate in Nigeria.
“And secondly because of Arik’s current Receivership Status. No investor wants to invest in a company in receivership.”
The investors proposed a number of initiatives for a resolution of the receivership, among which was that Arik’s debt should be reduced from agreed N65 billion in 2018 when there were 12 aircraft in operation down to N30 billion due to the current state of affairs of the airline.
Tijani lamented that in a society where the government preaches Private Public Partnership (PPP), it was wrong for the same government to act as both the shepherd and the butcher.
“We are not jobless and we want to defend our investment at all cost”, he added.