Respite may be coming the way of Sir Joseph Arumemi-Ikhide led management of Arik Air following talks with a Middle East firm to recover the airline from Asset Management Corporation of Nigeria (AMCON) and offset its debt with the bad bank.
Arik Air is in receivership due to its inability to pay workers and creditors, prompting AMCON to take control of the airline on February 9.
Arik, which was founded a decade ago, was West Africa’s biggest carrier by passenger numbers. It struggled with debt amid a currency crisis in the country.
AMCON had said Arik Air was in “a precarious situation largely attributable to its heavy financial debt burden, bad corporate governance … that required immediate intervention.”
Oluseye Opasanya (SAN), the Receiver Manager of Arik Air, said the embattled airline was indebted to its trade and finance creditors to the tune of N387 billion.
However, Arumemi-Ikhide led management insists its total debt exposure, including that of international creditors and local debts, amounted to N160 billion, which represents a 16.4 percent of its value put at $3.2 billion by Deloitte UK in 2013.
Investigations by Independent over the weekend revealed that the Middle East firm, which has its headquarters in Dubai, United Arab Emirates (UAE), held series of meetings with Sir Joseph Arumemi-Ikhide led management on how to partner with the airline to pay back its debts.
A source close to the airline told Independent that shareholders of the airline were also in discussion with other major investors and creditors to partner with them in order to offset the debts of AMCON.
Apart from the Dubai-based firm, it was gathered that the airline’s shareholders are also discussing with Deloitte UK, Barclays Africa and a UK-based law firm.
The shareholders of the airline, Independent learnt, had reached a commitment with the Middle East-based conglomerate with interest to do business in Africa.
It was also gathered that the company had voted funds to invest in airline business, power and agriculture and it was attracted to Arik Air which would serve as platform to invest in air transport on the continent, adding that the continent had been projected as new bastion of hope for economic development in the world.
According to the source, Arik Air and the company started negotiation last week in London and had reached some commitments and a team had been selected by each firm to continue with the negotiations.
Arumemi-Ikhide, chairman of Arik Air before its takeover, confirmed the development in a phone interview with Independent on Sunday.
He specifically said that the unnamed investor had started negotiation with the shareholders of the company and so far both parties have had fruitful discussions, stressing that negotiation on the partnership still continues at the moment.
Sources close to the carrier also disclosed that the company investor was willing to build maintenance, repair and overhaul (MRO) facility in Nigeria if government gave it the needed support because it has voted funds to invest in Africa in that direction.
“We have been having discussions with investors and 10 days ago we had discussion with a US-based company, but we are having serious discussion now with this organisation, which is based in the Middle East because they have a package to invest in Africa and take advantage of the growing economy in the region.
“We have reached agreement on what I will call the sub-heads, but the details will come out in our next discussion, but so far the discussion has been fruitful. They are interested in expanding our operations and will give us additional airplanes in addition to the six we ordered from Boeing; so we have to expand our operations throughout Africa and other international destinations with their partnership.
“They are eager to invest in Nigeria but, of course, with the support of the Nigerian government and they said that government support is crucial because you cannot really succeed in airline business without government’s support and that is necessary for them to invest in Nigeria or they will take their funds to another African country.”
Informed sources also said that Arik Air shareholders are putting a strong team for the next round of discussion, including Deloitte UK, Barclays Africa and UK-based law firm.