AMCON’s sale of Air Nigeria planes under threat

The plan by the Asset Management Corporation of Nigeria to sell Air Nigeria’s four medium-size planes and other assets as a last resort to recover the airline’s non-performing loans may be stalled due to legal issues, industry sources familiar with the situation have said. Specifically, it was learnt that an aviation logistics and ground handling company had been in court with Air Nigeria, asking the airline to pay about N300m for services rendered when the carrier was flying. Although judgement had been delivered in favour of Air Nigeria over the issue, it was learnt that the logistics/ ground handling firm was at an advance stage of filing an appeal.
Industry sources said the owners of the ground handling company had been threatening to do everything possible to stop the sale of the planes unless AMCON or the bank, which transferred Air Nigeria’s bad debt to the agency, settled the indebtedness. “AMCON cannot claim it bought only the assets of Air Nigeria without its liabilities. The bank involved is also exonerating itself. Judgement has been delivered in their favour but the company is filing an appeal,” a source close the ground handling company, who spoke under the condition of anonymity because of the legal issues surrounding the matter, told our correspondent on Monday. Meanwhile, AMCON has already taken over the four aircraft belonging to Air Nigeria. The corporation’s spokesman, Mr. Kayode Lambo, had last week confirmed that 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 had explained. He, however, said AMCON was not sure of the marketability of the airline’s planes as they had been on the ground for too long. Lambo 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.” An AMCON spokesperson, Nichol Ope, told our correspondent on Wednesday the matter was between Air Nigeria and UBA Capital. She did not comment on whether the legal issue would affect AMCON’s ultimate plan to sell Air Nigeria’s assets. Air Nigeria, originally Virgin Nigeria Airways and later 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 the country 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 stake 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.