Nigeria Risks Losing N4.9bn As AMCON Makes Wrong Call In Private Jet Deal

Nigeria may lose $31 million, about N4.96 billion as Mr. Mustafa Chike-Obi, Managing Director and Chief Executive Officer, Asset Management Corporation of Nigeria, AMCON, yesterday, admitted that it was a mistake on the part of the corporation to have acquired a private jet as part of its debt recovery efforts.

He stated this while speaking at the Board of Directors Association of Nigeria, BDAN symposium on ‘The impact of AMCON on the Nigerian Economy’ in Lagos.

Indications emerged that AMCON might have difficulty in recovering the $31 million spent in the acquisition of the jet, as Chike-Obi disclosed that AMCON “ïs currently experiencing difficulties in selling off the jet.”

It was learnt that the corporation had been incurring storage costs on the plane in the last eight months in order to continue to keep it airworthy.

Chike-Obi said AMCON was offering to sell the jet for $28 million, but it has been gathered that prospective buyers are offering far below the amount.

It was learnt that there was little hope that prospective buyers would offer higher amount for the jet due to the falling prices of private jets globally.

Explaining how the private jet was acquired, he said, it was collected from a business executive through an asset transfer deal in settlement of his indebtedness.

According to him, AMCON had this customer, who was highly indebted. He came to them and said he had assets which he would willingly relinquish, but asked to be left with some of his assets amounting to just five per cent. That included his living house, a house in Abuja and others.

Chike-Obi said: “If we don’t do that, he will go to court and we knew it will cost us more than ten per cent if went to court, so we surrendered.

“But as we were negotiating with the gentleman, we found out that he had deposited $4 million, (N640 million) with an aeroplane company for a private jet. So we said, ‘no, you cannot be negotiating with us and be buying private jet.’

“We told him that we will take over that $4 million, and he said he will give us back the $4 million, but the aeroplane company will not give us the money unless we complete the purchase of the private jet.

“So we decided to complete the purchase and took delivery of the plane. But we have encountered difficulty in selling the plane.

“We did not anticipate such difficulty. Had we known that would happen, we would have let the $4 million go and that was a mistake on our part.

“Everybody makes mistakes. It was an honest mistake based on the fact that we did not want to allow the customer to settle with us and go ahead to buy aeroplane.”

He explained that AMCON put in additional $27 million to complete the purchase of the private jet as the total cost was $31 million (about N4.9 billion).

He, however, refused to name the customer that was involved even as he said that the corporation already had a buyer and they are close to disposing of the plane.

Speaking on the extent of the debt recovery so far, he said: “We are recovering about 112 per cent and we are getting more than we paid for the loans so far. That means that on the non performing loans side, we are making profit, but we have other things.

“We capitalised the banks with N2.3 trillion and that is not going to be wrapped together with the sinking fund.”

He also disclosed that Enterprise and Mainstreet banks will be sold this month.
“Enterprise will be sold first and then Mainstreet second,” he said.

He added that he hoped that both transactions would have been concluded by September this year.

He did not, however, disclose who the buyers would be, but said there are interested buyers, who cannot be named because regulatory approvals are needed from both Central Bank of Nigeria, the Securities and Exchange Commission and other regulatory bodies.