Investors Eye Ailing Airlines, Arik, Aero Contractors

• Adeosun confirms British govt to unveil Nigerian ownership of assets in UK

Kunle Aderinokun, Obinna Chima and Nosa Alekhuogie in Washington D.C.

Some private equity investors are reportedly seriously considering investing in Arik Air and Aero Contractors – two distressed local airlines that have been taken over by the Asset Management Corporation of Nigeria (AMCON).

The Minister of Finance, Mrs. Kemi Adeosun, who revealed this during an interview with journalists in Washington D.C. Sunday night, said the investors had held discussions with some members of the federal government’s delegation to the just concluded International Monetary Fund (IMF)/World Bank Spring Meetings.

AMCON took over both airlines following their huge indebtedness to the corporation and other creditors – local and foreign – as well as corporate governance failure.

But Adeosun explained: “It was a preliminary discussion. They just expressed interest in buying the airlines and we told them that we would look into it.
“Most of them are interested in investing in Nigeria and they just want to be sure that the timing is right. Some are looking at buying one of the airlines with AMCON and just waiting to be sure that our policies are right.

“I think it is a welcome sign that investors are now looking to invest in Nigeria, which we are looking for. We have shown the world that we are serious and that we are fighting corruption. We have shown the world that we are trying to improve ease of doing business and the next phase is investment.
“Investment does not come first, it is usually the last phase and I am very excited about it. So we have people that want to invest in power plants and the airlines.”

She, however, declined to disclose the identities of the firms that were considering staking funds in the airlines, saying: “They are private investors, so that could be foreign or local.”
Prior to the takeover of Aero Contractors by AMCON, the corporation was the airline’s majority shareholder and its largest creditor.

Commencing business in 1959, Aero Contractors is Nigeria’s oldest aviation company and initially provided services to the oil and gas sector, before venturing into fixed wing operations in 2000.
Also, after months of uncertainty over the fate of Arik Air, AMCON in February took over the management of the airline, stating that the decision had become necessary to save the distressed airline, which it said was “too important to fail”.

In justifying the takeover of the airline, AMCON had said the action was taken to save the airline, which accounts for about 55 per cent of domestic passenger traffic.
It said its grounding would have caused a major catastrophe in the aviation sector and the Nigerian economy at large.

Continuing, Adeosun also confirmed that an arrangement was being worked out that would ensure that Nigerians that own houses and other assets in the United Kingdom are unveiled.
“There is going to be much better cooperation from the international community. The British government under the beneficiary ownership register, which was signed with David Cameron before he left, is going to give us the list of everyone (Nigerians) that owns property in the United Kingdom.

“Once it is owned by a Nigerian, they will give us the name. With that, we are able to compare the amount of tax those that own four or five properties in the UK pay in Nigeria.
“It is going to be a very systematic way of ensuring that people do the right thing,” she explained.