Stories by Lawani Mikairu
Aviation stakeholders have reacted to the inability of the federal government to attract investors who are willing to put their money in Arik Air and Aero Contractors airlines two years after they came under the receivership of the Assets Management Corporation of Nigeria , AMCON. Arik Air has not had any interested investor, while Aero Contractors was said to have had investors already streamlined to three for negotiations with the management.
Sources within the airlines told Vanguard that since AMCON took over the management of Arik in February 2017, only a Chinese firm in March of the same year, indicated interest to invest in the airline. The management source , who does not want to be named, 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. A family has 100 per cent 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.”
The two airlines, Arik Air and Aero are however held down by legacy investors; “but while the Ibru family could be made to water down their ownership in Aero Contractors, it would be difficult to do the same in Arik”, the source said.
Recall AMCON had 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 Mr. 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”.
Reacting to the lack of investors for the two airlines, Mr. Ayo Obilana, the Chief Executive Officer (CEO) of Selective Securities International Limited said that lack of transparency, due diligence and policy somersaults on the part of the government would make it difficult for the nation’s aviation industry to attract willing investors.
Obilana said: “Sincerely, I have not been following the trends at Arik Air since AMCON took over. However, it is a 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.
“In Nigeria, government policies change and because of this, a lot of people are very reluctant to put their money in such an economy. Government must show sincerity of purpose, and also show consistency in its policies in other to change this poor perspective” Obilana added.
On the alleged debts of N300bn of Arik Air, he doubted the figure and called for transparency from all those concerned.
Another stakeholder, a former staff of default Nigeria Airways said it will be difficult to sell the two airlines because most potential investors do not trust the federal government when it comes to financial agreements. According to the staff, who did not want to be named, “ Federal government may not honour their own side of the sales’ agreement. They may be reluctant to put certain things like facilities and policies in place that will facilitate easy take off for the new owners.”