AMCON boss at Lecture, seeks CBN’s kind of monitoring on banks’ for local airlines
Barring any last minute change, airlines may soon be monitored the way and manner the Central Bank of Nigeria (CBN) is on the toes of banking institutions to avoid bankruptcy and collapse.
Already, the Managing Director, Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru gave the idea at the 6th Nigeria Transport Awards and Lecture in Lagos, saying “Time has come for all agencies saddled with the responsibility of regulating the aviation industry and other critical sectors of the economy to adopt the same template, which the CBN used in streamlining banking operations in the country.
Explaining ore through his paper entitled: ‘AMCON’s intervention in transport and allied sector; achievements, challenges and prospects’, Kuru averred that such an approach would ensure stiffer corporate governance in the business of aviation and other critical sectors, minimise risks as well as ensure that the experiences, which necessitated the agency’s intervention in Arik and Aero Contractors would not recur.
Represented by the Senior Vice President, AMCON, Mr. Kamilu Omokide, AMCON boss argued that the huge debt owed the corporation would have been avoided if the debtor companies had proper corporate governance structures that took better business decisions.
He argued further that with many failed entities as a result of poor decisions that led to huge non-performing loans, he said the government had no choice then but to create AMCON to mop up the bad loans, thereby stabilising and revitalising the Nigerian economy.
He revealed that even though AMCON had purchased non-performing loans worth about N181bn from various banks, 90 per cent of the loans purchased was in the aviation sector.
Kuru stated, “AMCON was created to be a stabilising and revitalising tool in the Nigerian economy”.
“To place the companies in a position to recover and generate adequate cash flow, we gave additional on-lending facilities (in collaboration with Central Bank of Nigeria and Bank of Industry) of almost N40bn on very good terms.
“Unfortunately, notwithstanding this support, the companies could neither pay the old nor new loans. We have, therefore, been compelled to appoint receiver managers over a lot of the companies, the biggest being Arik and Aero.”
He listed some of the challenges of AMCON’s intervention in the aviation industry to include shareholders’ actions, lack of support by some trade creditors and some foreign lenders, and increased union demands.
