Return of Arik Air to owners will encourage foreign investment – Shareholder

Alhaji Abdulrauf Tijjani, one of the shareholders of Arik Air, is demanding the return of the airline to its original owners, stressing that the move will encourage and strengthen foreign investment in Nigeria.

Tijjani, who disclosed this in an interview with our reporter on Monday in Abuja, said the return would rekindle the interest of foreign investors in the airline and make them to make resources available for its revamping.

According to him, Ark Air has been taken over by the Assets Management Corporation of Nigerian (AMCON) since February 2017 as a result of the airline`s debt to financial institutions, and has been under receivership ever since.

“The airline steadily grew under its former owners, including the acquisition of wide-body aircraft, for operations to Johannesburg, London and New York.

“Nevertheless, Arik was hampered by several challenges, including scarcity of foreign exchange, high cost of funds, high operating costs and infrastructure limitations.

“Since the takeover, we have approached many foreign investors all of whom have been reluctant to invest in the company because of the perceived hostile and uncertain investment climate in Nigeria.

“Besides, because of Arik’s current receivership status, no investor wants to invest in a company in receivership,’’ Tijanni said.

He noted that the shareholders have sought mutually satisfactory and commercially tenable proposition to resolve the matter of continued take-over of the airline.

“The proposal is that Arik’s debt be reduced from N65 billion assessed in 2018 when there were 12 aircraft in operation down to N30 billion, due to the current state of affairs of the airline. Interest on this sum of money should be fixed within seven years repayment and a moratorium of two years.

“AMCON, through the Central Bank of Nigeria (CBN) and Bank of Industry (BOI) should avail Arik of a low interest loan of N70 billion. This facility will be used to rebuild the airline, specifically returning all viable aircraft to serviceable condition, and restore the airline to full operations.

“Some portion of this facility will be used to settle Arik’s creditors (mainly Zenith Bank, Access Bank and Ecobank). AMCON/CBN to assist Arik to get necessary foreign exchange directly from CBN, while Arik Air should be returned to its owners and all litigations stopped.

“Similarly, Rockson Engineering Ltd, a sister company of Arik, should be returned to its owners after negotiations, the stakeholder said.

Tijjani said that returning the airline to its original owners would help to create more jobs and assist in the country’s economic recovery.