Nigeria's Amcon Says Some Local Airlines May Collapse Over Debt

(Bloomberg) -- Some Nigerian airlines are facing the risk of collapse under the weight of huge debts, according to the country’s Asset Management Corporation of Nigeria, set up to rescue banks from bad loans.

“The industry remains in the throes of airlines burdened with debts, under administration or on the borderline of collapse," Amcon chief executive Ahmed Kuru said at a conference in Lagos, without identifying those that may fail.

Amcon acquired the country’s biggest airline Arik last year because of difficulties arising from huge debts and poor corporate governance, it said. The Abuja-based Amcon was established in 2010 to buy non-performing loans and rescue lenders after the industry was threatened with collapse.

Nigeria’s more than 10 domestic airlines are struggling with difficulties arising from the country’s first economic contraction in a quarter century in 2016, and have seen reduced access to capital and limited leasing opportunities. Africa’s biggest oil producer also has the continent’s largest population of almost 200 million people.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editors responsible for this story: Sophie Mongalvy at smongalvy@bloomberg.net, Dulue Mbachu, Vernon Wessels

©2018 Bloomberg L.P.