Long Read. Intrigue trail the takeover of Arik Air by FG as powerful cabal fingered in AMCON takeover

Long Read. Intrigue trail the takeover of Arik Air by FG as powerful cabal fingered in AMCON takeover

This is a long but very interesting and informative piece. It will be recalled that last week, the federal government enforced a commando-style takeover of Arik Air with truckloads of soldiers. The official line was that the company was irredeemably in debt to the tune of over 300billion and had to be rescued from going under. It appears however that there is more to this than meets the eye. Rumour has it that the takeover was masterminded by a cabal which capitalised on the President's absence, a banking source close to the issue disclosed the debt is far lower than claimed.

The AMCON-appointed new management of Arik air headed by the Chief Executive Officer, Capt. Roy Ukpebo Ilegbodu has made series of revelations about the airline. AMCON, in a statement, yesterday, said:

“The Asset Management Corporation of Nigeria, AMCON, has discovered deep rooted rot at Arik Airlines, which would require over N10 billion to fix before the largest local carrier would resume full and uninterrupted flight operations to its regular routes across the country and beyond.
“The situation is so bad that only nine aircraft out of the 30 in the fleet of the airline is operational. 21 of them have either been grounded, gone for C-check in Europe among other forms of challenges.
‘’As if these problems are not enough, the airline does not have money to procure aviation fuel for the nine operational aircraft because no dealer wants to sell aviation fuel to Arik if it is not on cash-and-carry basis.
‘’This also calls for public understanding because flight schedules may be realigned based on the nine aircraft that are available, technically sound and ready for flight operation.
“It was also discovered that Arik also owes its technical partners and also in perpetual default in its lease payments and insurance premium, leading to regular and embarrassing squabbles with different business partners, which account for why 21 aircraft are off the fleet for different reasons.
‘’All these problems, in addition to huge staff salaries, which have remained unpaid for 11 months; vendors that supply different items to Arik Airlines that are also owed, meant that Nigerians may have to tarry awhile to allow the new management clean up the huge mess at the airline before Arik would finally resume uninterrupted flight.”

Despite the aforementioned challenges, Capt. Ilegbodu assured at the weekend, that these issues, though daunting, would be gradually resolved to enable Arik Airlines, which carries about 55 per cent of the load in the country, recover the 21 aircraft.

He said: 

“Once all the aircraft are back to the fleet, Arik Airlines would within the shortest possible time regain its pride of place as a leader among the comity of airlines in Nigeria.
‘’Having settled the insurance cover for the aircraft, which would have expired on February 12 and met with different trade creditors as well as aggrieved staff, Arik will return to full operational capacity within the shortest possible time frame.”

Here comes the interesting part, sources close to the vine have it that the Arik takeover is being masterminded by a powerful but clandestine cabal bent on creating a national carrier with Arik Air at its core.

According to these sources, the cabal has in the past tried to convince President Buhari to appropriate Arik Air with a view to forming a national carrier. The president is said to have been dismissive of their suggestions saying:

“I am not interested in taking anybody’s business.” The cabal has however gone ahead to exploit his absence and carry out their plans. What's even more interesting is that Arik Air had a meeting scheduled with Afreximbank in Cairo, Egypt, this week to unlock a massive capital injection, a move which would have happened last year but was hampered by the prevailing forex crisis. AMCON is said to have moved quickly to take over the airline before its management could get its hands on the loan. Justifying its action, AMCON said it considered Arik Air too critical in the aviation sector to be allowed to go under.

According to a source who is a top banker:

“Contrary to the bogus claims that Arik Air was owing over N300 billion, I am aware that in the last reconciliation between the suspended management and AMCON, the figure agreed was in the neighbourhood of N90billion.
“For an airline valued independently at over $4 billion by a world renowned valuer like Deloitte of London, I do not think that the company could be regarded as a bad case with such debt profile.
“Some powerful interests are just desperate to call a dog a bad name in order to hang it. The agenda is to bring together Arik Air and Aero to form what they call new national carrier and bring in Ethiopian Airways as technical partner.
‘’Can you imagine, going to bring Ethiopia to run a national carrier for Nigeria, the supposed Giant of Africa? If government could run an airline, Nigeria Airways would not have gone under.
“The said N90 billion provided by AMCON was to buy back loan provided by Union Bank to acquire two brand new A340 Airbus aircraft being used for international haul by the company. So, it is most unfair to accuse the promoters of Arik of mismanagement when everyone knows that the economy is in distress and even foreign airlines have had to downgrade their operations in the country due to the hostile environment.
“If AMCON says the suspended management was incompetent, is it not ironic that the same AMCON a few hours later named the Deputy Managing Director of the same management it discredited as new CEO of Aero Contractor?
“It is an insult on the intelligence of the Nigerian public. If AMCON itself is a good business manager, how come Aero, which had nine aircraft when AMCON took it over five years ago now has only two aircraft in its fleet?
“As a matter of fact, the suspended management was already scheduled to have a meeting with Afreximbank team in Cairo this week to finalize the negotiation of massive capital injection into Arik to enable it refinance its debt to AMCON.
“The AFREZIM’s cash was supposed to have come last year alongside additional funds from private placement that the old management wanted to do to raise more funds to reposition the company. But the massive devaluation of naira by the CBN upset all the plans as new financial outlays had to be done to reflect naira’s new value."

Arik Air is one of only three airlines including South African Airways and Ethiopian Airline to be certified in Africa by the influential Israeli secret service, MOSSAD, to fly directly to Tel Aviv. The drama continues.