- As AMCON Stabilizes Arik Air, With N1.5b
Dangote Sugar Plc has indicated a desire to produce 1.5 million tonnes of refined sugar, within the next six years, from locally grown sugarcane.
The company’s acting Managing Director, Mr Abdullahi Sule made this known at the company’s fact behind the figures at the Nigerian Stock Exchange (NSE) in Lagos on Tuesday.
Sule said that the company was also projecting to produce 130 million litres of ethanol across all its sites, in addition to equally generating not less than 100,000 jobs under its master plan.
A zero – debt company since it commenced operations, Sule highlighted that the company was presently exploring the process of raising the required N106b to fund the expansion project.
“We are going to spend about N106 billion to expand its operation during the preview period of which 20 per cent of the fund will come from equity,’’ he said.
Sule noted that 20 per cent of the fund would be raised through equity, adding that the board of directors would decide the direction of the equity raising programme.
“Dangote Sugar remains a zero debt company. In the first three years of the project, we will spend about N106 billion and the board members have decided that 20 per cent would be raised through equity.
“By the end of this year, we will be able to fund the N20 billion but it is taking us time to decide whether it is through extra-ordinary meeting or through loan.
“The company is still in position to borrow and still pay dividends,’’ he said.
Sule, however, assured that the company would continue to pay dividends.
“We are confident that this ambitious goal is achievable and we will leave no stone unturned in seeing that it becomes a reality,” he said.
Sule added that about N101 billion had been committed toward actualisation of the company’s Backward Integration Project (BIP) targets.
“To date, about N101 billion has been committed toward the actualisation of these projects on equipment purchase, land studies and survey, and sensitisation campaign for the local communities,” he said.
The company posited for the financial year ended Dec. 31, 2016 a turnover of N169.72 billion against N101.06 billion achieved in the comparative period of 2015.
Profit after tax stood at N14.39 billion against N11.14 billion in 2015, while profit before tax rose to N19.61 billion in contrast with N16.16 billion in the previous year.
In the meantime, in a bid to ensure that the Airk Airline Ltd remains afloat and operational, the
Asset Management Company of Nigeria (AMCON) has injected N1.5 billion in to it, since its takeover.
The Arik Air Chief Executive Officer, Capt. Roy Ilegbodu stated this at a news conference in Lagos while highlighting the company’s operations since its takeover by AMCON, noting that the funds injected by AMCON went into payment of salaries, the stabilisation of the airline’s operations, and prevention of its collapse.
He said the funds were injected into the company in the first couple of weeks the new management took over the airline.
“When we started on Feb.9, we took our time to study what was on ground in Arik, It was quite interesting and disturbing for an airline with 30 airplanes on its books with only 10 functional,” he said, adding that the management actually met a lot of refund when it took over the company, noting that it paid between N60 million and N75 million to customers as a refund on a weekly basis.
He said that the company had remained in business due to AMCON ‘s support, adding that the support helped in sustaining the airline operations in spite of huge debts incurred before the Federal Government takeover.
He said that AMCON’s intervention in the airline was timely because the things on grounds showed that the company would have collapased in the next couple of weeks or months.
Ilegbodu said that there were no spare parts in the stores to support the airlines operations with huge bills left unpaid and people refusing to offer credits to the company due to breach of trust.
He said that AMCON’s intervention helped the company to seek for spare parts, noting that it would be flying 14 airlines by the middle of this month.
The chief executive officer said that the company was engaging its creditors on the way forward, adding that the receiver manager was currently in London to discuss with foreign creditors.
He said KPMG had been appointed to carry out a proper audit of the books, adding that more revelations were coming up on daily basis.
According to him, the outcome of the audit will enable the government to decide on the next line of action.
“We are all looking forward to the closure of the audit because it will show the true position of the company,” he said.
He said that the company slowed down operations by scaling down on international flights, suspended some of its aircraft to have good control of operations because of huge damage discovered in Arik.
“Aviation is a business of a many moving parts. Processes in the industry are very well regulated and guided too. They call it a business of many moving parts and everything is done systematically.
We have managed to stabilise operations and we have been able to clear the staff salaries. A lot of expatriates have been paid to date,” Ilegbodu said.
He added that the company had achieved a level of stability, noting that, passengers number had gone up with the lifting of over 3,000 passengers on April 28.
Ilegbodu said that the company would continue to engage people and manage situations to woo customers back to the airline.
He, however, assured customers that things would normalise in the airline in the next couple of weeks.
As I speak we have achieved a level of stability and customers numbers had gone up. We have stabilised operations, the airline will survive and there is a potential for the airline to grow, ” he said.
On the challenges affecting aviation industry, he said that the industry was capital intensive and should be for long-term purpose and not short-term.
He said that Nigeria had the potential to produce the highest airline in Africa based on its population but needed people with the passion, financial muscle and competency.
Ilegbodu listed the instability in the foreign exchange market as another factor affecting the industry, adding that strong business plan was imperative to avert incessant collapse of airlines.
The AMCON, on Feb. 9, took over Arik over a N135 billion debt and appointed a new management led by Ilegbodu.