… as AMCON injects N1.5bn into airline in two months
Affidavit deposed to by the receiver manager of Arik Air, Oluseye Opasanya, before the Federal High Court in Lagos, reveals that Arik Air owes N387 billion.
Speaking with newsmen yesterday, Jude Nwauzor, spokesman, Asset Management Corporation of Nigeria (AMCON), said with this huge debt, there was no way the carrier could have remained profitable without the takeover of the business by the intervention agency.
However, AMCON says it has injected over N1.5 billion into the troubled carrier since it took it over on February 8, 2017.
Nwauzor said the airline was indebted to many institutions, some of which included insurance companies, aviation agencies, aircraft lessors, and other creditors for services rendered without payment.
He said upon takeover of the airline two months ago, there were no spare parts in the aircraft stores, a development that could have threatened the safety of its operations, save for the timely intervention of AMCON.
According to Nwauzor, the unfolding rot still being discovered at Arik Airlines amazes the new team at the airline.
A document released by AMCON read: “As a matter of fact, the salaries of the expatriate and local staff of Arik were unpaid since October 2016, while the airline owed premiums on its insurance policy because the previous management of Arik took insurance on a monthly basis instead of annually in accordance with aviation global best practice for the insurance of aviation assets.
“Indeed, Arik operations would have been grounded indefinitely if AMCON did not intervene as the insurance policy of Arik was to lapse on February 10, 2017.
“As at that date, Arik owed a total of N418, 893,067.97 in arrears of unpaid premium just as its employees’ health insurance had also expired and as a result, both the pilots and other members of staff of the airline were to halt operations as well.
“It has also come to the fore that the airline failed to remit pension contributions of its employees despite making the necessary pension deductions from their salaries for which the National Pension Commission had written to demand over N4billion being the outstanding pension remittance.
“Aside from that, Arik Arik also owe Lufthansa Technik Group, the company responsible for the maintenance of the airplanes a whopping 31 million Euros just to mention a few.
“AMCON took over Arik to underscores government’s decision to instil sanity in the nation’s aviation sector and prevented a major catastrophe that protected and preserved Arik. The takeover would among other objectives enhance the value of Arik, improve customer experience, and sustain the safety, reliable and secure operational history of the airline.
“Arik was in a precarious situation largely attributable to its heavy financial debt burden, bad corporate governance, erratic operational challenges and other issues, that required immediate intervention in order to guarantee the continued survival of the airline.”
