News Flash - AMCON, debtors reach deal on N1trn loan repayment

[naija2day]

The Asset Management Corporation of Nigeria (AMCON ), debtor companies and individuals have agreed and restructured over N1 trillion worth of loans as at end-December 2012, Source gathered.

The restructured amount is part of the N5.6 trillion non-performing loans it acquired from banks to  safe-guard depositors' money and rescue banks from liquidation, thereby preventing job losses in the industry.

The corporation is also predicting that N400 billion will be pooled into a sinking fund that it has established by the end of this year. About N200 billion was paid into the fund as at end 2012.

The restructured deals include extension of tenure to make for ease of repayment and in some cases, additional funding to rejuvenate  debtor companies.

"Restructuring these loans instead of insisting on outright payment, which many of  the debtor companies  may not be able to do , will allow the  loans to perform better, the companies to go on with their businesses, and employees to keep their jobs", said Mustapha Chike-Obi, CEO, AMCON, in an exclusive interview with BusinessDay.

He said that as part of the strategy to financially empower the corporation to perform its duty, a sinking fund was created, into which the Central Bank and deposit money banks pay  certain sums periodically.

The AMCON boss expressed satisfaction with the level of co-operation  the corporation has received  from debtors, with the exception of a difficult few, who are  yet to come to terms  with the fact that  the borrowed money is depositors' funds which must be paid. He however affirmed that every effort would be made to recover all monies .

"The  restructured N1 trillion loans was  well ahead of target," he said, adding that restructuring the loans was  more beneficial to the economy than breathing down  on, and closing such companies.

He however debunked information making the rounds, that AMCON made a loss of N2.1 trillion at the end of the 2011 financial year, as not true, saying that was the amount of money lost by the banks before AMCON came in.

'"The N2.1 trillion loss was the amount of depositors money lost by the banks and not by AMCON operation. AMCON absorbed the loss in the interest of depositors and Nigerians".

AMCON is a home grown asset management company designed by the Central Bank of Nigeria ( CBN) to clean up banks'  bad assets  and stabilise the financial sector which was in deep crisis.

Apart from restructuring of loans and availing of additional funding to debtor companies, AMCON has taken steps  in cleaning up the financial system, with a forbearance package to 84 stock broking  firms.

Chike-Obi expressed surprise at the furore that greeted forbearance packages, especially those who interpreted it to mean that the Federal Government gave money which should have been used to finance the development of infrastructure in the country to these stock broking firms. He explained that both the Federal Government and AMCON did not   give money to the firms.

"Nobody gave money to these brokers. They owed money which they could not pay. AMCON demanded collateral  so that they can go back to business and save jobs," he said.

NaijaToday

[Folami David]

It is very good an agreement was reached. This is how it should be in this country. We should learn to agree