Despite the efforts of the President Muhammadu Buhari administration to assist businesses survive the negative impact of COVID-19 pandemic, a group of local investors has said their investment in Arik Air is going down the drain since the Asset Management Company of Nigeria (AMCON) took over the airline.

AMCON had taken over the management of the airline over an alleged N300 billion.

According to the investors, the take over by was both illegal and ill-advised.

Arik Air in 2017 accounted for 55% of the Nigerian aviation market.

The airline is now managed by Roy Ukpebo Ilegbodu, an aviation expert, under the receivership of Oluseye Opasanya, a senior advocate of Nigeria (SAN).

However, the Arik Air investors at a media briefing in Abuja on Wednesday lamented that investments in the airline by foreign partners have ceased since the AMCON takeover.

In a letter to the President Muhammadu Buhari dated October 26, 2020, the investors urged the government to return the airline to its owners to portray Nigeria in a good light on the global business stage.

Speaking on their behalf, Gen. Abdul-Rauf Tijani (retd.), argued that the funds used to set up the airline were offshore loans which local banks only provided some form of guarantee in line with rules of foreign borrowing.

He said: “Taking over Arik Air is unlawful. The Nigerian banks you’re trying to protect didn’t give the loan used to set up Arik Air. Arik Air got $5 billion loan to start up over 10 years ago.

“No Nigerian bank could afford such an amount of money. So, they were just guarantors. Arik has paid the loan back.

“Zenith Bank had no such money when Arik got the $5billion. So, where then is the authority to take over Arik Air?

“The money of Arik since the takeover, who is the custodian? Where is the annual report and account of the airline? AMCON is not the owner of Arik.

“In 2012-2013, Arik was valued by offshore valuers at $2.3 billion and in 2017, it was $6 billion. AMCON now came to take over the airline with 1,800 workers. Today, how many staff are left”, he queried.

According to him, the recent retrenchment of 300 employees of Arik was attributable to the continued lack of investments in the carrier since it was taken over by AMCON.

In their letter of appeal to the President, the investors urged Buhari to intervene in the takeover of Arik by AMCON.

The letter read in part, “We hereby appeal to Your Excellency to intervene on AMCON takeover of Arik Ltd. This takeover occurred on February 9th 2017.

“Ever since, we have approached many foreign investors all of whom have been reluctant to invest in the company because of the perceived hostile and uncertain investment climate in Nigeria.

“And secondly because of Arik’s current Receivership Status. No investor wants to invest in a company in receivership.”

The investors proposed a number of initiatives for a resolution of the receivership, they include:

We hereby propose a number of initiatives for a resolution of the receivership.

Arik’s debt should be reduced from agreed N65 billion (Sixty-five billion naira) in 2018 when there were 12 aircrafts in operation down to N30 billion (thirty billion naira) due to the current state of affairs of the airline. Interest on this sum of money should be fixed within seven years repayment and a moratorium of two years.

AMCON through CBN/BOI should avail Arik with a low interest loan of N70 billion. This facility will be used to rebuild the Airline, specifically returning all viable aircrafts to serviceable condition and restore the airline to full operation. Some portion of this facility will be used to settle Arik’s creditors (mainly Zenith, Access and Ecobank).
AMCON/CBN to assist Arik to get necessary foreign exchange directly from CBN.

Arik Airline should be returned to its owners and all litigations should be stopped.

Similarly, Rockson Engineering Ltd, a sister company of Arik, should be returned to its owners after negotiations.

Your Excellency, I crave for your favourable approval which will help create a lot of jobs and assist in economic recovery; and also assist in restoring international investors’ confidence to our dear country.

Tijani lamented that in a society where the government preaches Private Public Partnership (PPP), it was wrong for the same government to act as both the shepherd and the butcher.

“We are not jobless and we want to defend our investment at all cost”, he added.