BREAKING NEWS, Business
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The Asset Management Corporation of Nigeria recovers N644 billion from debtors while posting a loss of about N304.35 billion in 2015
THE Asset Management Corporation of Nigeria, AMCON, has made a debt recovery of about N644 billion while acknowledging that its job is not a very easy task.
Stating that the ability of AMCON to recover debt depends largely on the state of the economy, Ahmed Kuru, managing director of the debt recovery agency, said that 56 per cent of its debtors had agreed on a repayment plan to liquidate their debt.
“Debt recovery is a very, very difficult assignment. Eighty percent of facilities are still outstanding. Purchased loans from the banks has been restructured. We have to followed due process to collect the money being owed AMCOM. We have no agenda,” Kuru told journalists on Friday, August 5, in Lagos.
AMCON posted a loss of N304.35 billion in 2015 more than 2014 loss of N275.49 billion.
According to Kuru, “Loss is unavoidable.” He explained that when AMCON bought the facilities between 2010 and 2011, there were interest elements on them. “The obligors were made to pay interest which in itself from beginning was faulty. That is because, the banks that sold these facilities to us had already provided for them. They were not charging interest at all because the businesses were dead. At the initial stage, there was a gap between the purchase price and the face value of the liabilities.
“So, for some of these obligors, by coming to AMCON, already they had a discount. Almost 51 per cent of those accounts were restructured. Now, in CBN’s valuation and based on prudential guidelines provisions, any account that you have restructured with a payment plan, is a performing account. Let us not forget that these accounts were brought from somewhere they had been buried.
“For you to now say AMCON is going to make profit in the next couple of years is not possible because these facilities are hard-core facilities and they are not performing. The only thing we can do is to continue to recover them. Let us not forget the fact that AMCON was not set up to make profit. It is not a profit-making organisation. AMCON is a resolution company that has a timeline,” he said.
Similarly, Aminu Ismail, executive director, also explained that the large chunk of the loss was due to the six per cent interest it is currently paying, adding that situation would continue to improve over a period of time.
AMCON lifespan is 10 years. It has about three more years before it stops operation unless the Act establishing is amended.
— Aug. 8, 2016 @ 11: 20 GMT
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