The plan by the Asset Management Corporation of Nigeria (AMCON) to collapse the assets of Arik Air and Aero Contractors into a new airline, Nigerian Eagle, may attract intense legal bottlenecks, Daily Independent has gathered.
Multiple sources close to the two airlines confided in our correspondent that their former owners, Sir. Joseph Arumemi-Ikhide (Arik Air) and the Ibru family (Aero Contractors) may be warming up for a colossal legal battle with the Federal Government and AMCON or any investor that buys the assets of any of the airlines.
It was learnt that Arik International may have instituted a lawsuit against the Federal Government for “illegally taking over the airline” in February 2017.
Attempts to get the position of AMCON on the alleged collapse of the two airlines proved abortive as Jude Nwauzor, Head, Corporate Communications, AMCON, did not respond to phone calls made to his mobile line.
A few weeks ago, Nwauzor told our correspondent that the corporation had other interests in the country’s aviation industry, apart from Arik and Aero Contractors.
He did say that Capt. Ado Sanusi, the former Chief Executive Officer (CEO) of Aero Contractors, was removed from his position in order to carry out a “higher assignment” by AMCON, but declined to explain further.
It was learnt that Sanusi may be redeployed to Nigerian Eagle by AMCON as its pioneer CEO.
Already, AMCON, it was learnt, was making frantic effort to come out with the new airline before the end of the year, but the anticipated legal battle may slow down its plan.
Most stakeholders in the industry could not confirm the true position of AMCON on the issue but said an attempt to collapse the assets of any of the two airlines would attract serious legal battles from their former owners, the financial institutions they were indebted to, and industry unions.
Comrade Frances Akinjole, the Deputy General Secretary, Air Transport Senior Staff Services of Nigeria (ATSSSAN), in an interview with our correspondent, said the unions could join the legal fight against AMCON.
According to him, the unions, through their members in the airlines, were creditors and should be seen to represent the interest of the workers.
He noted that the two families – Ibru and Arumemi-Ikhide – and other financial institutions may equally sue AMCON for attempting to collapse the airlines.
The ATSSSAN Deputy General Secretary threatened that the unions may also truncate the plan of AMCON, through the Nigerian Civil Aviation Authority (NCAA), stressing that the processes would be disrupted by the unions.
Akinjole, however, said the unions were not averse to any strategy that could bring a new lease of life to the two carriers.
He explained that the two airlines, especially Aero, had a pending redundancy negotiation yet to be offset since 2016.
This is apart from the current staff working in the airline but yet to be paid their remunerations by the management.
He said: “Anybody that doesn’t think towards legal battle must be living in a fool’s paradise.
“However, that is not our thinking for now. It is not only Arumemi and Ibru, there are humongous debts hanging on the necks of these two airlines.
“Others will come. Just as I told you, we are also creditors to the airlines as workers are involved.
“If they are genuine in whatever they are contemplating, I commend them because it is in our interest for both companies to continue as going concerns, but they should do the proper thing. We cannot continue to play second fiddle.”
Besides, Alex Nwuba, an aviation analyst, warned that stripping the assets of the two airlines would lead to long term legal challenges by the former owners and financial institutions in the country and abroad.
But Nwuba declined to make a categorical statement on the alleged impending collapse of the assets of the two airlines, saying that AMCON should be decisive with the assets under its management.
Besides, he emphasised that AMCON should decide to either keep the two airlines as a single running entity or liquidate the carriers, maintaining that the future of the carriers had been in doubt with consistent depreciation of their assets and lack of clear direction by the corporation.
He added: “AMCON has no business starting or launching a business that is not its mandate. It may choose to create a public structure that capitalises a new airline.
“This does several things: saves the companies, raises money to make the business viable, recovers as much of the debts as possible and preserves its mandate.
“Starting an airline with its history and experience does not demonstrate that it will recover the debt it was set up to accomplish, but rather will waste more of the national resources.”
Grp. Capt. John Ojikutu, aviation analyst, observed that there could be serious legal bottlenecks between AMCON and former promoters of the two airlines if AMCON had negated its Article on Loan Agreements before the takeover of the airlines.
“The question I have always asked is: did AMCON take over the airlines because of default in agreement or because ‘the Federal Government ordered it’? What does our bankruptcy laws say about corporate debts, if we have any?
“There seem to be many things not clear to me, especially how a financial institution like AMCON is contemplating setting up an airline with recovered assets. Let’s see how they go about it all.”
He, however, gave his backing to the collapse of the assets of the two airlines if the foreign and local debts of the airlines were negotiated and foreign technical partners and investors were invited.
He insisted that AMCON lacked the managerial skills for commercial aviation to recover the debts of over N300 billion owed by the airlines in 30 years.
Gabriel Olowo, President, Aviation Round Table (ART), said the initiative was good, but warned AMCON of legal complications.
Olowo pointed out that a professional receiver manager was authorised by law to do the needful after a careful decision is taken on either to turn around and or liquidate an enterprise.
He added: “AMCON has experimented turnaround for almost five years now without positive improvement. The option left is to repackage for sale.
“Its ability to manage the challenges of the two airlines is doubtful. The resignation of Aero CEO is a pointer that things may not be going according to plans.”
Olumide Ohunayo, Director, Research, Zenith Travels, backed the alleged plan of AMCON to offset the assets of the two airlines, but said it should not act outside its Act.
Also, in order to prevent lawsuits, Ohunayo opined that the owners of the two “debt ridden carriers are carried along and briefed properly by the corporation”.
Chris Aligbe, a public relations expert, wondered why AMCON wanted to collapse the two airlines and rename them Nigerian Eagle.
Rather, he canvassed for the appointment of turnaround managers for the airline, stressing that since AMCON took over the two airlines years back, it was yet to publish their audited accounts.
“I don’t know the basis for attempting to collapse the airlines. What I know they need is a turnaround manager. It is usually a team and not one person. Without that they will never get it right. Otherwise, they will still be groping,” he said.
Aligbe explained that any attempt to rename the two airlines would lead to huge legal tussles from the former owners, creditors and financial institutions in and out of the country.
Besides, he said, none of the two airlines should be made a national carrier, stressing that this would lead to more problems for the government.
