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AMCON plans to sell Air Nigeria’s planes

By on April 11, 2014

The Asset Management Corporation of Nigeria is considering the sale of four medium-sized planes and the entire assets of Air Nigeria as a final resort to recover the multibillion
naira non-performing loans of the airline, investigations by our correspondent have shown.

According to sources familiar with situation, AMCON has already taken over Air Nigeria’s four aircraft, which have been parked at the Murtala Muhammed Airport in Lagos for the past 18 months.

However, it is uncertain if the sales proceeds will amount to any significant value considering the carrier’s huge indebtedness.

AMCON had bought the airline’s non-performing loans from Deposit Money Banks.

Confirming the development, the spokesman for AMCON, Mr. Kayode Lambo, said the bad debt manager was looking at selling Air Nigeria’s assets as a final plan to recover the non-performing loans.

“Air Nigeria is neither operating nor can it be merged in a practical manner with another airline. Ultimately, it seems AMCON may have to look at selling the assets and recovering what can be recovered,” Lambo explained.

The AMCON spokesman, however, said the bad debt manager was not sure of the marketability of the airline’s planes as they had been on the ground for too long a time.

The planes are currently in the custody of AMCON, according to Lambo.

He said, “Like all the others, the non-performing loan of Air Nigeria was purchased by AMCON as it is mandated to do.  The security for that loan includes those planes; so, they are with AMCON.

“I am not sure as to their airworthiness in their current state and the marketability.”

Industry sources said at least two of the planes might have reached the Beyond Economic Repair state in aviation parlance, meaning that the amount they could be sold for after fixing them would be below the repair cost.

Air Nigeria, originally Virgin Nigeria Airways and then Nigerian Eagle Airlines, was the national flag carrier.

On September 28, 2004, the Federal Government and the United Kingdom-based Virgin Group signed an agreement to establish a new airline for Nigeria to be called Virgin Nigeria Airways. Local institutional investors owned 51 per cent of the company and Virgin Atlantic Airways owned the balance.

On June 2, 2010, following the acquisition of a majority share in the airline, Mr. Jimoh Ibrahim, the new chairman, announced that the airline had undergone a further name change to Air Nigeria Development Limited, but branded as Air Nigeria.

On September 6, 2012, Air Nigeria announced that the management had fired its workers for disloyalty and that it would suspend all its local, regional and international operations.

Air Nigeria stopped operations on September 10, 2012.

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