Business Hilights

Tracking Nigeria's Headline Business News Online

Sirika NAir

Is it that Aero, Arik are leprous or credible investors are not interested?

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For more than two years since capital squeeze landed former leading domestic aviation giant, Aero Contractors into the hands of Asset Management Corporation of Nigeria (AMCON), there has not been any cheerful news of strong and credible buyers asking for the company.
The same fate is hovering on Arik Air currently on the hands of AMCON for sale.
Though there are unsubstantiated claims of attracting 19 investors since it was acquired in 2016 and that the number had been narrowed down to six and later three on Aero, there is still yet no clear sales direction as at today.
The Managing Director of Aero Contractors, Capt. Ado Sanusi, who confirmed the information, said the investors were looking at all the assets of the airline including its maintenance, repair and overhaul facility.
He said “There are so many investors that have come forward. They are looking at all the core assets.”
The two airlines, Arik Air and Aero, are held down by legacy investors, but while the Ibru family could be made to water down their ownership in Aero Contractors, a source close to the former airline said that it would be difficult for Sir Joseph Arumemi-Johnson family to do the same in Arik Air, having held 100 percent shares in the airline.
A source who pleaded anonymity averred that “Since AMCON took over Arik Air in 2017, only Chinese investors indicated interest in the airline and that was one month after the government agency took over. It will be difficult to sell Arik because of the heavy debt burden and the ownership structure. Johnson family has 100 percent shares of the airline.
“But, it is not the same with Aero where 19 investors indicated interest and these have been reviewed down to six, and recently to three. Those Chinese investors that initially indicated interest in Arik Air have invested in AWA and they aim to take over the West African market with time.”
Only last week, AMCON, claimed that since it took over the running of Arik Air on February 9, 2017, it had received investors locally and overseas who wanted to acquire the airline.
In a statement signed by Oluseye Opasanya, the Receiver Manager, Arik Air, the group said following the impressive performance of the airline, local and foreign investors were showing keen interest in the airline.
But in a swipe, the Chief Executive Officer (CEO) of Selective Securities International Limited, Ayo Obilana, said lack of transparency, due diligence, and policy summersaults on the part of the government would make it difficult for the nation’s aviation industry to attract willing investors.
Obilana argued further that “Sincerely, I have not been following the trends at Arik Air since AMCON took over. However, it is common sense that before any investor puts down his money or resources in any venture, he will ask himself if such business is going to be viable, there must also be due diligence, which is how comfortable it is going to be at the end of the day. Is it going to be a long term project or short term? Then, government policy must be consistent.”

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