Shareholding, depth of debts to dominate discussions on Dubai group deal in Arik Air
Emerging prospective team of investors from Dubai, United Arab Emirates in stressed Arik Air is set for second round of discussion that will be centered on structuring shareholding and the depth of the debts, which creditors must back with evidence, and operational conditions.
A dependable source hinted that “Shareholders of the airline have been meetings with other investors before getting a firm commitment with this Middle East-based conglomerate, which has its headquarters in Dubai”.
Key aspect of the deal will also be on how to offset the debts owed the Asset Management Corporation of Nigeria (AMCON) and other creditors.
Business Hilights gathered that Arik Air and the company started negotiation last week in London and have made some commitments with each party setting agreeing to set up a team to continue with the negotiations, later this month.
Whereas it was not clear whether AMCON was on the know, Arik Air shareholders are putting a strong team for the next round of discussion, which include Deloitte UK, Barclays Africa and UK-based law firm.
Chairman of Arik Air, Sir Joseph Arumemi-Ikhide in a telephone interview with aviation correspondents confirmed the negotiation with the Dubai investors, saying there are strong indications that the deal will scale through as soon as possible.
However, industry observers say one of the hiccups that may make or mar the investment may be the discrepancies in the real total of debt the airline is owning creditors.
This is coming on the heels of the differences between what AMCON is saying and what the airline insists on.
Whereas AMCON argued that Arik Air owed it about N263.7 billion, the airline has insisted that its total debt exposure, including that of international creditors and local debts amounted to N160 billion, which represents a 16.4 percent of its value put at $3.2 billion by Deloitte UK in 2013.
