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AMCON Plans to Boost Bond-Sale Limit by 50%

By on August 31, 2011

Asset Management Corp. of Nigeria, which buys non-performing debt from lenders in the West African nation, wants to raise the amount of bonds it is allowed to sell by 50 percent to 4.5 trillion naira ($29 billion).

The Abuja-based company, known as Amcon, will hold a meeting on Sept. 30 in Lagos to ask bondholders to consider and approve the plan, according to a notice published in ThisDay newspaper today. It didn’t give a reason for the move. Amcon’s office was closed for a public holiday.

The Central Bank of Nigeria established Amcon last year to buy non-performing debts from banks as part of financial- industry changes after a debt crisis in 2008 and 2009 threatened to collapse some of the lenders. The central bank fired the chief executive officers of eight of Nigeria’s lenders and bailed out the industry with 620 billion naira. This year, the bank gave the rescued lenders up to Sept. 30 to recapitalize.

Amcon, which sells bonds to fund the purchases of the non- performing loans, took over three of the bailed-out banks on Aug. 5. Afribank Plc, Bank PHB Plc and Spring Bank Plc came under Amcon’s control after the central bank said they were unlikely to meet the recapitalization deadline.