Canadian firm warns EFCC to steer clear of mortgage rights

By Business A.M.

• Arik Air

Export Development Canada has reacted to a recent announcement by Arik Air that JEM Leasing Limited, owners of the CRJ 1000 in its fleet registered as 5N-JEE and its financiers, EDC, have planned to sell the aeroplane, by  warning Nigeria’s Economic Financial and Crime Commission (EFCC) to lay off its Mortgage Rights, the CRJ 1000 which the crime commission is obstructing the owner from repossessing following a petition filed by Sir Johnson Arumemi, founder of Arik Air.

Based on this, some aviation observers are urgently calling upon the Nigerian State to protect the interests of international lenders, such as Export Development Canada (EDC), and other potential lenders closely monitoring the ongoing investigations by EFCC into the affairs of the Receiver Manager of Arik, as it relates to the enforcement of mortgage rights by EDC, in respect of a CRJ 1000 Aircraft owned by JEM Leasing.

Observers are of the opinion that the handling of this matter will significantly impact their decisions on whether to invest in Nigeria’s fragile economy, in future.

Observers say recent events surrounding the unjustified interference by the EFCC further to a petition by Sir Johnson Arumemi Ikhide, in respect of the sale of an aircraft by JEM Leasing Limited in cooperation with financing provided by EDC, have raised concerns about the interference faced by lenders and the potential repercussions for Nigeria’s economic fortunes.

“It is imperative for the Nigerian government to prioritise the preservation of investor confidence and provide a stable and supportive environment for international lenders.”

The EDC said allegations circulating in the public domain, particularly that the Receiver Manager of Arik has superintended over the stripping of the CRJ 1000 Aircraft, without the knowledge of the owner of the said Aircraft – JEM Leasing Limited, is untrue.

EDC, as a Crown Corporation wholly owned by the Government of Canada, plays a pivotal role in driving economic growth and development through investments in various projects worldwide.

In a letter written to the EFCC by EDC and made available to The Travel Port and titled: ‘One CRJ1000 aircraft with manufacturer’s serial number 19037, with its two General Electric model CF34 engines having, respectively, engine serial numbers 195273 and 195276 (the Aircraft)’, the EDC confirmed that ‘the Owner has entered into an agreement with Alberta Aviation Capital Corp. (the Buyer) to sell the Aircraft to the Buyer. That agreement was entered into with the consent and at the request of EDC.

It noted that the EDC financed in part the Owner’s acquisition of the Aircraft and as a condition to that financing, the Aircraft was mortgaged to EDC.

“The Aircraft remains mortgaged to EDC,” it stated.

“We attach at Annex 1 a letter (the Owner’s Letter) from the owner. We confirm the veracity of the statements set out in the Owner’s Letter, including that the Owner has entered into an agreement with ALBERTA AVIATION CAPITAL CORP. (the Buyer) to sell the Aircraft to the Buyer. That agreement was entered into with the consent and at the request of EDC.

“We understand that the EFCC may have taken certain steps that prevent the Buyer from having access to the Aircraft. As is clearly shown by the Owner’s Letter, the Owner has confirmed that it has agreed to sell the Aircraft to the Buyer, that the Buyer is authorised to tear down the Aircraft, and that ARIK AIR LIMITED (Arik) has no interest in the Aircraft.

“As stated in the Owner’s Letter, any interference action by Arik, or any other person, which impedes the Buyer’s access to the Aircraft, or any of the other steps, matters, processes or transactions outlined in 2(g) and 2(h) of the Owner’s Letter, will constitute improper interference with the Owner’s (and/or the Buyer’s) rights in respect of the Aircraft.

“Any such interference would also constitute improper interference with EDC’s rights as mortgagee of the Aircraft. We therefore respectfully request that the EFCC does not impede the Buyer’s access to the Aircraft or any of the other steps, matters, processes or transaction,” it added.