LAGOS Feb 9 Nigeria's Arik Air is in
receivership due to its inability to pay workers and creditors,
prompting the government to take control of the country's
biggest airline, state-owned "bad bank" AMCON said on Thursday.
Arik, which was founded a decade ago and is now west
Africa's biggest carrier by passenger numbers, has struggled
with debt amid a currency crisis in Nigeria, as customers are
invoiced in naira but fuel suppliers are paid in dollars.
In 2012, a central bank document showed Arik owed 85 billion
naira ($279 million) to the Asset Management Corporation of
Nigeria (AMCON), set up by the state in 2010 to stem a financial
crisis. AMCON had taken on more than 132 billion naira of debts
from 12 Nigerian airlines, including Arik.
"Arik Airline has been in a precarious situation largely
attributable to its heavy financial debt burden, bad corporate
governance ... that required immediate intervention," AMCON said
in a statement.
Arik declined to comment.
The airline, which handles more than half of domestic air
traffic in Nigeria, flies across Africa's most populous nation
and to London, New York and Johannesburg.
AMCON said Arik had temporarily suspended its operation to
New York and grounded more than eight other planes, adding that
the airline had also suffered from non-payment of leases. AMCON
said it had appointed a new team to manage Arik, supervised by a
The airline had been planning a private share placement to
raise as much as $1 billion and then a possible initial public
offering in Lagos and London, its managing director said in
Arik had wanted to expand internationally both to bring in
more hard currency, as well as to cushion the impact of the
economic slowdown at home, and was looking for new investors to
help it grow rather than using debt.
Nigeria, Africa's biggest economy, faces its worst recession
in 25 years, brought on by the fall in oil prices, which has
also triggered the currency crisis.
Some international carriers such as United Air Lines
and Iberia have cut or stopped flights to Nigeria
because those services are no longer profitable.
Others have complained about the difficulty of repatriating
millions of dollars worth of fares sold in naira.
($1 = 304.2500 naira)
(Reporting by Oludare Mayowa and Chijioke Ohuocha; editing by