Home Aviation 2 years after, investors yet to buy into Arik Air

2 years after, investors yet to buy into Arik Air

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Twenty-three months after the Assets Management Corporation of Nigeria (AMCON) took over the management of Arik Air, the troubled airline is yet to attract any known investors.

On the other hand, Aero Contractors, another airline under the receivership of AMCON, has attracted 19 willing investors in the past two years with the investors streamlined to just three for talks with the management.

Investigation by our correspondent indicated that since AMCON took over the management of Arik in February 2017, only a Chinese firm, in March of the same year, indicated interest in the airline, which is alleged to be owing over N300 billion as debts to partners, financial institutions, and others.

It was also gathered that the Chinese firm had commenced the investment talks with the former management of the airline, but had to withdraw its interest because of its ownership structure and massive debts owed different organisations.

Information gathered by our correspondent revealed that the Chinese investors, after failing to put pen to paper with the management of Arik Air, moved its investment into the Accra-based airline, African World Airlines (AWA), and positioned the carrier as a leader in the sub-region.

It was, however, gathered that Aero Contractors recently attracted 19 investors, which made enquiries about the airline.

A source close to the airline confided in our correspondent that the investors were later reviewed to six and now to three after series of meetings with AMCON.

At present, the three wiling investors are holding talks with the management of the airline.

The two airlines, Arik Air and Aero, are held down by legacy investors, but while the Ibru family could be made to water down their ownership in Aero Contractors, a source close to the former airline said that it would be difficult for Sir Joseph Arumemi-Johnson family to do the same in Arik Air, having held 100 percent shares in the airline.

The source said: “Since AMCON took over Arik Air in 2017, only Chinese investors indicated interest in the airline and that was one month after the government agency took over. It will be difficult to sell Arik because of the heavy debt burden and the ownership structure. Johnson family has 100 percent shares of the airline.

“But, it is not the same with Aero where 19 investors indicated interest and these have been reviewed down to six, and recently to three. Those Chinese investors that initially indicated interest in Arik Air have invested in AWA and they aim to take over the West African market with time.”

It would be recalled that AMCON, last week, claimed that since it took over the running of Arik Air on February 9, 2017, it had received investors locally and overseas who wanted to acquire the airline.

A statement signed by Oluseye Opasanya, the Receiver Manager, Arik Air, said following the impressive performance of the airline, local and foreign investors were showing keen interest in the airline.

However, Ayo Obilana, the Chief Executive Officer (CEO) of Selective Securities International Limited, said lack of transparency, due diligence, and policy summersaults on the part of the government would make it difficult for the nation’s aviation industry to attract willing investors.

He said, “Sincerely, I have not been following the trends at Arik Air since AMCON took over. However, it is common sense that before any investor puts down his money or resources in any venture, he will ask himself if such business is going to be viable, there must also be due diligence, which is how comfortable it is going to be at the end of the day. Is it going to be a long term project or short term? Then, government policy must be consistent.” t;\

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