…..to finance 5.7 trn outstanding bad debts
The Managing Director/Chief Executive Officer Asset Management Corporation of Nigeria (AMCON), Mr Ahmed Kuru said the corporation recovered N134 billion in 2016while there is outstanding 5.7 trn bad debts to be financed at 6% interest rate.
While breaking down the amount recovered, Kuru explained that N86.9 billion was from cash collections while N30.64 billion came from assets forfeiture.
He said that N7.9 billion was realised from sale of property and N8.7 billion from sale of shares.
On the performance of the company, the head of finance and budgeting of the corporation, Olugbenga Atayeiro said AMCON made gain of N27.15 bn on fair value of its unrestructured loans, the credit loss expense reduced by about N37 billion from 2015 to 2016. He also announced that the corporation was able to reduce its operating expenses by about N8 billion.
Ataiyero, clarified that the corporation’s mandate was not to make profit but to reconstruct loans to help businesses.
Ataiyero said that there were over N5.7 trillion loans to be financed by the corporation through the CBN at six per cent interest.
He noted that N268 billion was charged into the company’s profit and loss as interest expenses annually.
The chief financial officer further said that the company would divest from some of its subsidiaries to reduce the losses.
He added that the corporation had adopted a cost-saving approach and would only engage in very crucial expenses.
Ataiyero said that loan recovery was very low in 2016 due to the recession and other challenges in the economy.
He said that the corporation had envisaged that banks would have contributed N288 billion as sinking fund in 2016 but were only able to contribute N136 billion, due to the economic crunch.
On Arik Air, Kuru said the airline was about to go under when AMCON intervened, he put the outstanding debt of the airline at N147 billion.
According to him, AMCON intervention made it possible for the airline to survive.
“As at the time we intervened, there were fears of seizure of the airline’s aircraft abroad due to debts on those routes” Kuru said
He added that the airline was not paying salaries, insurances and fuel obligations, among others before AMCON intervention, adding that 30 aircraft of the company belonged to different people under leases and loans.
“AMCON’s has no business to run any business; we look for best personnel in the industry, independent of AMCON, to run any organisation we take over.
“We have disbursed more than N300 billion to support businesses to ensure their survival,” Kuru said.
On the rumour that the Federal Government is planning to float the national carrier with Arik and Aero Contractor airlines, Kuru described such move as suicidal as the two companies has so much problems confronting them aside series of litigations such move would spring up.
He commended the President Muhammadu Buhari’s government over its body language to the obligors which he described as saying “go and pay your debt”