The Asset Management Corporation of Nigeria (AMCON) has said it would liquidate and sell Arik Air after it has vacated all the cases it has with the airline, pointing out that doing so before then would be subjudice.
This was disclosed yesterday in Lagos by AMCON’s spokesman, Jude Nwauzor, during a media briefing organised by the organisation.
Giving details of AMCON’s involvement in the airline, Nwauzor said Arik Air owes AMCON the sum of N227,637,469,394.34 billion and combined with the total debts owed AMCON by Joseph Arumemi-Ikhide’s other companies, which include Rockson Engineering – N163,502, 837, 397.75 billion and Ojemai Farms – N14, 031, 457, 980.71 billion, the total debts rose to N455, 171, 764, 772.80 billion at the end of December, 2024.
“The task of debt recovery has been arduous and challenging. While several thousands of Nigerians and Nigerian companies have honoured their obligations, AMCON continues to face resistance from a number of debtors who are unwilling to pay without a fight. One of these debtors is Arik Air Limited (in Receivership), an airline company owned by Sir Johnson Arumemi-Ikhide, who is also the promoter of Rockson Nigeria Limited (a power infrastructure company), Ojemai Farms Limited, and Ojemai Investment Limited.
“These companies’ debts were transferred by various banks to AMCON due to their non-performance, with a total indebtedness of N455, 171, 764, 772.80 billion as at December 31, 2024. Arik owes AMCON N227,637,469,394.34 billion; Rockson Engineering N163,502, 837, 397.75 billion and Ojemai Farms N14, 031, 457, 980.71 billion,” he said.
Nwauzor said despite alleged smear campaign against the corporation by Arumemi-Ikhide, the debts must be recovered one way or the other, saying the leadership of AMCON knows that there was no nice way of recovering debt.
“For that, obligors go to any length to assassinate the characters of both AMCON staff and management, they malign the name of AMCON, intimidate, and harass our personnel with every arsenal at their disposal,” Nwauzor said.
He said AMCON’s mandate was of national importance, but, “if at sunset AMCON is unable to recover the huge debt of over N4 trillion, it becomes the debt of the federal government of Nigeria for which taxpayers’ monies will be used to settle. The implication is that the general public will be made to pay for the recklessness of only a few individuals who continue to take advantage of the loopholes in our laws to escape their moral and legal obligations to repay their debts.”
Nwauzor said amongst several inaccurate claims, the founder of Arik, Johnson Arumemi-Ikhide, “has consistently peddled a false narrative regarding his debt to AMCON, claiming that Arik never defaulted in its payment obligations to Union Bank and feigning ignorance of the debt owed to AMCON. He has also alleged that the receivership was premature and claimed his loan was performing.
“These claims are misleading. The intelligent public must ask, if the loan was performing, why was it sold and restructured? And why did he agree to the restructuring?
“Did he fulfill the agreed terms? The decision to classify the loan as non-performing and to sell it was made by Union Bank of Nigeria PLC (UBN), in accordance with the Prudential Guidelines set by the Central Bank of Nigeria (CBN). Union Bank willingly offered the Arik loans to AMCON, which purchased the loans in compliance with the law,” Nwauzor stated.
He further explained that in a letter dated October 22, 2010, Union Bank informed Arik that its loans, which amounted to a staggering $474 million (approximately N70 billion at the time), were non-performing and posed a threat to the bank’s stability. This loan exposure, Nwauzor said, was a significant factor in Union Bank’s financial challenges.
“It is important to note that beyond Union Bank, Arik’s loans were also sold to AMCON by Bank PHB (now Keystone Bank), and Sir Johnson Arumemi-Ikhide has, on several occasions, admitted to this indebtedness. Following the purchase of the loans, Sir Johnson willingly agreed to restructure the loans, acknowledging the debt. In any event, any challenge of the purchase of the NPLs by AMCON is statute-barred and there are provisions within the AMCON Act demonstrating that there is no valid cause of action that may arise from such a challenge.
“In any event, from 2011 to 2017, AMCON engaged in prolonged negotiations with Arik’s management (who never questioned the NPLs), but despite several financial accommodations, debt reduction offers, and restructuring efforts, Arik consistently defaulted on its obligations. AMCON was left with no choice but to consider various recovery options,” Nwauzor said.
He explained that one of the options was receivership because during pre-receivership, Arik was allegedly plagued by insolvency “and operational paralysis”, noting that the company’s financial condition was catastrophic and claimed that a KPMG report commissioned by AMCON revealed that Arik was balance-sheet insolvent, with a negative equity value of approximately N80 billion and total liabilities amounting to N289 billion as of December 31, 2016.
“Additionally, PwC Nigeria, the company’s long-standing auditors (previously appointed by Sir Johnson Arumemi-Ikhide), conducted audits for the years 2015 and 2016. These audits confirmed that Arik had been technically insolvent since 2014, with its liabilities exceeding its assets throughout 2015 and 2016, up until the commencement of the receivership in 2017. As of December 2016, Arik’s negative shareholder capital stood at N139 billion, nearly equivalent to its debt to AMCON.
“During this period, Arik’s operations were severely compromised. Between November 2016 and January 2017, Arik faced numerous challenges, including the cancellation of flights, inability to fulfill ticketed obligations, and a suspension of operations due to failure to pay for insurance. The airline was also engaged in protracted disputes with NCAA, FAAN, and NAMA, with combined claims of about N30 billion,” the AMCON spokesman said.
Nwauzor claimed that upon take over, airworthy aircraft in the fleet were nine, while 11 were not immediately available for service upon AMCON takeover in 2017; 14 aircraft were under creditor control or sold by creditors, but presently, the number of aircraft under Arik Air inventory and the airline’s control as at August 31, 2024, were 30 in number.
Nwauzor also boasted that AMCON has been empowered by the National Assembly to purchase, manage and dispose of assets, including that of Arik Air. It also empowers AMCON to appoint a receiver or receiver manager, dispose of assets of a debtor company, like Arik Air and explained that why it had not liquidated Arik Air before now was to save the jobs of thousands of Nigerians and to sustain the fleet capacity in the domestic airline market.
However, Nwauzor did not say what AMCON contributed to the company since it took it over on February 9, 2017 in terms of revenue, profitability and increase in aircraft fleet, but stressed that it improved the workforce of the organisation, which reduced from about 3,000 to less than 1, 500.
