Recovery Was Slow In 2016 Because Of Nigeria’s Economic Predicament – Kuru

Asset Management Corporation of Nigerian (AMCON) at the weekend said total debt recovery as at year-end 31st December 2016 stands at N134 billion. The special government agency also revealed that it is itching close to selling one of its subsidiaries, the Peugeot Automobile of Nigeria (PAN) in Kaduna State. Mr. Ahmed Kuru, Managing Director/CEO of the agency who made the disclosure in Lagos at a media parley said the Corporation was considering selling off PAN to Africa’s richest man, Alhaji Aliko Dangote and two other states in Nigeria. He said, “PAN is ready to be offloaded by AMCON; but we are awaiting regulatory approval,” he said.

At the same interactive session, Mr. Olugbenga Ataiyero, AMCON Chief Financial Officer (CFO) disclosed that a total recovery of N134 billion was made in 2016, “not all were cash,” he said. According to him, a breakdown of this shows that N86.9 billion was collected in cash, N30.46 billion in assets forfeiture, N7.9 billion in sales of properties and dividend and other shares that we sold amounted to N8.7 billion. Kuru, the MD of AMCON had disclosed to journalists that the Nigerian bad bank has in its balance sheet in excess of N5 trillion and spent about N1.7 trillion to purchase assets worth about N3.3 trillion. “Besides the N1.7 trillion used to purchase non-performing loans (NPLs), N2.2 trillion financial accommodations are not backed by any asset,” he affirmed.

According to him, assets cannot be sold as obligors are not willing to pay their debts, ‘ in the last five to six years, AMCON has called on debtors to renegotiate with them and about N5.7 trillion has not been paid, some obligors are doing well despite the economic recession; but are not willing to pay” he disclosed. Kuru affirmed that in the cause of business, AMCON has been facing a lot of challenges and 2016 has been very tough for the Corporation. “Recovery is very slow in 2016 because of the present economic predicament in Nigeria,” Kuru added. Ataiyero, the CFO of the nation’s bad bank said in the financial year ended 2016, the Corporation as a standalone entity made a loss of N254 billion compared to N304 billion reported in 2015 end.

While as a Group it made a loss of N352 billion in 2016 compared to N295 billion in 2015. Kuru also disclosed that for the past two to three years, the Corporation has stopped putting money in businesses, ‘AMCON has invested about N300 billion into businesses to support them, “he added. “We have also stopped buying loans since 2013, continuous loan buying encourages rascality,” he said. The MD of AMCON said the Corporation had to intervene in case of Arik airline and bought over debts worth N147 billion. ‘ If we didn’t do that, Arik will have been grounded; we saw it was a necessity and we had to intervene, we didn’t get into Arik to take over the business; but for it to survive and all options are on the table for Arik to survive” Kuru said.

He disclosed that Arik is now fully focused on domestic routes rather than the international routes where it cannot compete, “also there are threats abroad from foreign stakeholders that the airline is yet to meet its obligation and could be seized if it fly’s international, we are on it and trying to resolve the matter, right now its fully focused on domestic routes, “Kuru affirmed. The CEO of AMCON also disclosed that the Corporation has contributed N913 billion into the sinking fund as at date.

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