Arik Debt Of N227,637,469,394.34 Billion: Why It Should Be Recovered, By AMCON
The Asset Management Corporation of Nigeria (AMCON) says it needs the media’s collaboration in efforts to recover debt of N455,171,764,772.80 billion owed AMCON jointly by Arik Air and Sir Johnson Arumemi-Ikhide’s other companies, out of which Arik owes N227,637,469,394.34 billion, explaining why the debt has to be recovered.
Presenting to journalists, the issue of the indebtedness of Arik Air Limited (in Receivership) and its owner, Sir Johnson Arumemi-Ikhide, to the Asset Management Corporation of Nigeria (AMCON), AMCON’s Head of Media and Communications, Jude Nwauzor said: “At AMCON, we see the Media as very strategic to our recovery mandate because most of these obligors run to the media with some skewed narratives in their desperation to make AMCON look bad. The point remains that these are debtors that have contributed to killing the Nigerian economy. The media must not allow them to eat their cake and have it. As the media is the mirror of society, the management of AMCON is convinced that a deeper collaboration between AMCON and the Media will deliver positive dividends for the country. We believe that when these obligors who own most of the private jets you see at our airports are challenged by the media, they will not be as bold and audacious as they have become.”
He said “the task of debt recovery has been arduous and challenging. While several thousands of Nigerians and Nigerian companies have honoured their obligations, AMCON continues to face resistance from a number of debtors who are unwilling to pay without a fight. One of these debtors is Arik Air Limited (in Receivership), an airline company owned by Sir Johnson Arumemi-Ikhide, who is also the promoter of Rockson Nigeria Limited (a power infrastructure company), Ojeimai Farms Limited, and Ojemai Investment Limited. These companies’ debts were transferred by various banks to AMCON due to their non-performance, with a total indebtedness ofN455, 171, 764, 772.80 billion as at December 31, 2024.”
According to AMCON, “Arik Arik owes AMCON N227,637,469,394.34 billion; Rockson Engineering N163,502, 837, 397.75 billion and Ojemai Farms N14, 031, 457, 980.71 billion. The fact of the matter is that no matter the smear campaign he is sponsoring against AMCON, these debts must be recovered one way or the other. The leadership of AMCON knows that there is no nice way of recovering debt. For that, obligors go to any length to assassinate the characters of both AMCON staff and Management. They malign the name of AMCON, intimidate, and harass our personnel with every arsenal at their disposal. Repeatedly, AMCON has made the point at every opportunity that all stakeholders including the Aviation Media must view the AMCON mandate as one of serious national importance. If at sunset AMCON is unable to recover the huge debt of over N4trillion, it becomes the debt of the Federal Government of Nigeria for which taxpayers’ monies will be used to settle. The implication is that the general public will be made to pay for the recklessness of only a few individuals who continue to take advantage of the loopholes in our laws to escape their moral and legal obligations to repay their debts. The question AMCON would want the media to ask Sir Johnson Arumemi-Ikide is if indeed he took these loans that led the banks to sell the loans to AMCON. If his answer is yes, the aviation media should also be interested in his effort(s) at repayment.”
“Amongst several inaccurate claims, the founder of Arik, Sir Johnson Arumemi-Ikhide, has consistently peddled a false narrative regarding his debt to AMCON, claiming that Arik never defaulted in its payment obligations to Union Bank and feigning ignorance of the debt owed to AMCON. He has also alleged that the receivership was premature and claimed his loan was performing.
These claims are misleading. The intelligent public must ask, if the loan was performing, why was it sold and restructured? And why did he agree to the restructuring? Did he fulfill the agreed terms?
The decision to classify the loan as non-performing and to sell it was made by Union Bank of Nigeria PLC (UBN), in accordance with the Prudential Guidelines set by the Central Bank of Nigeria (CBN). Union Bank willingly offered the Arik loans to AMCON, which purchased the loans in compliance with the law.
In a letter dated October 22, 2010, UBN informed Arik that its loans, which amounted to a staggering $474 million (approximately ₦70 billion at the time), were non-performing and posed a threat to the bank’s stability. This loan exposure was a significant factor in Union Bank’s financial challenges.
It is important to note that beyond Union Bank, Arik’s loans were also sold to AMCON by Bank PHB (now Keystone Bank), and Sir Johnson Arumemi-Ikhide has, on several occasions, admitted to this indebtedness. Following the purchase of the loans, Sir Johnson willingly agreed to restructure the loans, acknowledging the debt. In any event, any challenge of the purchase of the NPLs by AMCON is statute-barred and there are provisions within the AMCON Act demonstrating that there is no valid cause of action that may arise from such a challenge.
In any event, from 2011 to 2017, AMCON engaged in prolonged negotiations with Arik’s management (who never questioned the NPLs), but despite several financial accommodations, debt reduction offers, and restructuring efforts, Arik consistently defaulted on its obligations. AMCON was left with no choice but to consider various recovery options.”
Why the Receivership? “Pre-receivership, Arik was plagued by insolvency and operational paralysis. The company’s financial condition was catastrophic. A KPMG report commissioned by AMCON revealed that Arik was balance-sheet insolvent, with a negative equity value of approximately ₦80 billion and total liabilities amounting to ₦289 billion as of December 31, 2016. Additionally, PwC Nigeria, the company’s long-standing auditors (previously appointed by Sir Johnson Arumemi-Ikhide), conducted audits for the years 2015 and 2016. These audits confirmed that Arik had been technically insolvent since 2014, with its liabilities exceeding its assets throughout 2015 and 2016, up until the commencement of the receivership in 2017. As of December 2016, Arik’s negative shareholder capital stood at ₦139 billion, nearly equivalent to its debt to AMCON.
During this period, Arik’s operations were severely compromised. Between November 2016 and January 2017, Arik faced numerous challenges, including the cancellation of flights, inability to fulfill ticketed obligations, and a suspension of operations due to failure to pay for insurance. The airline was also engaged in protracted disputes with NCAA, FAAN, and NAMA, with combined claims of about ₦30 billion.
The government, concerned about the safety of the airline, the welfare of over 1,500 employees, and the stability of the aviation industry urged AMCON to intervene. As a result, AMCON appointed a Receiver-Manager in compliance with the AMCON Act to stabilize the operations of Arik.”
On the receivership, “it is vital to clarify that the validity of the receivership has been affirmed by the court and is not in question. In Suit No. FHC/L/CS/1175/2021, between Johnson Arumemi-Ikhide & Anor v. Kamilu Alaba Omokide & Ors, the Federal High Court, Lagos Division, presided over by Hon. Justice A. Lewis-Allagoa, affirmed the validity of the receivership. The court upheld the exclusive authority of the Receiver-Manager to manage the affairs of Arik. Problematizing or questioning the legal basis of the receivership now is insincere.”
“When the Receivership Team took over Arik, the company was financially stranded and facing imminent shutdown. The airline had no adequate cash reserves, and its operations were near collapse. Critical maintenance was overdue, many planes were grounded, and the company owed substantial sums to various service providers, including Maintenance Repair Organizations (MROs), who had withdrawn their services. Arik’s on-time performance (OTP) was below 40%, with many flights being cancelled due to inadequate working capital.
The staffing issues were severe, with employees going unpaid for months and critical training suspended due to lack of funds. Insurance policies had expired, and the company was heavily indebted to multiple service providers, including federal aviation agencies and international operators.
Sir Johnson Arumemi-Ikhide has also made misleading claims regarding the mismanagement of Arik’s fleet under the receivership. On the contrary, upon taking over the company, the Receivership Team found a fleet in disarray, with only eight operational aircraft (as against the inaccurate 30 being bandied about), many of which required urgent maintenance. Some of the planes had been used as collateral for Sir Johnson’s personal debts, leading to repossession by creditors.”
In the concluding statement, AMCON said “certain publications have raised the issue of the charge filed by the EFCC in relation to Arik’s issues, attempting to suggest that this absolves Sir Johnson Arumemi-Ikhide of his indebtedness to AMCON. However, the existence of a criminal charge does not detract from his obligations. No determination of criminality has been made in these matters, and AMCON remains resolute in its efforts to recover the debts owed by Arik and its shareholders. Sir Johnson’s refusal to settle the debts owed is a disservice to the commonwealth and the Nigerian people. AMCON assures the public that while the recovery process may take time, we remain committed to achieving an optimal recovery from Arik and its shareholders.”
The AMCON Act, in Section 6 empowered the corporation to purchase, manage, and dispose of EBAs, which include Arik. Section 48 empowers the corporation to appoint a Receiver or Receiver Manager to take, manage, and dispose of assets of a debtor company like Arik. The corporation, upon Feder
The Corporation upon Federal Government, and Central Bank of Nigeria (CBN) directives applied Section 48 of the AMCON Act by appointing a Receiver Manager (RM) to take over all assets of Arik and did put the same under receivership. The RM is empowered by the same section to either manage, or sell assets of Arik and liquidate Arik.
“However, due to Federal Government/CBN directives, Arik was managed in its bad state and already insolvent, without any kobo from anyone by the corporation. The Corporation met trade creditors to Arik debt, debt to its technical partners, and debt to other aviation experts all over the world. Managing these debts was challenging for the corporation, which still can liquidate Arik. But here we are still managing Arik, which was already insolvent and still insolvent even as we discuss,” stated AMCON, which identified the inventory of aircraft available from the “acclaimed” 30 aircraft at the commencement of receivership February 2017, as 5N-MJH, B737-700, 5N-MJN, B737-800, 5N-MJJ, B737-700, 5N-MJK, B737-700, 5N-MJE, B737-700, 5N-MJF, B737-700, 5N-JEE, CRJ1000, 5N-BKX, Q400 and 5N-JED, CRJ900. Some were under creditor control/sold to creditors while some had been repossessed.
