August 27, (THEWILL) – The Federal Government has disclosed plans for the potential merger of Arik Air and Aero Contractors, into a national carrier.
The Asset Management Corporation of Nigeria (AMCON) disclosed this during a meeting with media executives in Lagos on Monday.
AMCON Managing Director/Chief Executive Officer, Gbenga Alade, said both airlines have accumulated so much debt that they might not be able to repay.
He said the merger of the two airlines into a national carrier was rejected by the former aviation minister when it was proposed.
“The former management of AMCON presented the idea of converting Arik and Aero to a national carrier. But the former aviation minister did not buy the idea. We will present it again because that is the best option”, he said, adding that a special purpose vehicle (SPV) was created by the previous AMCON management to facilitate the conversion of the airlines into a national carrier, but was sold off.
“Unfortunately, the special purpose vehicle that was created by the former management of AMCON for the conversion of Arik and Aero to a national carrier had been sold. But we can create another SPV for this.
“Believe me, it is a very difficult problem to resolve, and it is giving me sleepless nights, particularly Arik. Arik is owing so much that they cannot pay”, he said.
Alade, who disclosed that Arik owes Afreximbank around $52 million, said after negotiations, the airline was only willing to pay $8.5 million of that amount.
“However, where will that $8.5m come from? Where? AMCON doesn’t have money of its own to put there”, he added.
Alade, however, said AMCON is working hard to keep Arik operational, with a goal to have three planes flying now and hopefully seven planes by February next year.
