Nigeria’s bad bank seeks stakeholders’ collaboration on speedy asset disposals as 35% comprises properties

In a bid to rejig its asset sales strategy and facilitate speedy disposals, the Asset Management Corporation of Nigeria (AMCON) says it is restructuring its processes internally and seeking the collaboration of all stakeholders for better outcomes in its asset resolution operations.

Ahmed Kuru, the managing director/chief executive officer of AMCON, disclosed this while declaring open a 2-day Asset Sales Strategy Retreat in Abuja Wednesday.

Aminu Ismail, the corporation’s executive director in charge of operations who represented the Kuru, stated that part of the strategy was to expand the scope of its sales strategy by engaging professionals from the real estate sector including legal experts and regulatory stakeholders and cross-fertilise ideas on better measures to follow to enable AMCON dispose its huge assets at good value and in good time in line with AMCON mandate.

“As you may be aware, one of the key objectives of AMCON is—to obtain the best achievable financial returns for all assets acquired. Following the acquisition of eligible bank assets (EBAs), AMCON is now saddled with the responsibility for recovering the bad loans either through cash repayments or asset forfeitures/foreclosures.

“In fact, the bulk of recoveries, which have been recorded at AMCON are in form of asset recoveries. Considering the fact that AMCON’s obligations to the Central Bank Nigeria (CBN) is in the form of cash repayment, AMCON therefore has the responsibility of converting the assets into cash in order to meet the repayment obligations,” he said.

Kuru noted that AMCON from inception in 2010 to December 2017 recorded total recoveries of N731 billion (excluding claw backs). Out of this amount, properties accounted for approximately 35 percent.

He however stated that the corporation noticed an increasing decline in its ability to dispose assets at competitive market rates due to the several factors including inflation among other market dynamics.

“At AMCON, we have realized that we cannot continue to do business as usual – it has therefore become imperative for us to seek more innovative ways of converting our huge portfolio of assets into liquid cash as quickly as possible.

We have convened some of the most resourceful real estate professionals and legal experts to this forum to help brainstorm through the issues and proffer practical solutions to the challenges confronting AMCON. We also invited critical regulatory stakeholders to contribute to the discourse toward finding workable solutions,” he said.

Also speaking at the retreat, Eberechukwu Uneze, executive director in charge of asset management at AMCON, who also chaired the plenary session, stated that there was dire need to have professionals, experts and agencies collaborate with AMCON because the corporation has a stockpile of assets, which it is finding difficult to dispose in the regular open market.

These assets, he said, cut across critical sectors of the economy such as real estate, energy, transportation and aviation, maritime, agriculture and manufacturing just to mention a few, all of which he said must be disposed as quickly as possible against all odds the agency is challenged with.

The retreat featured high-powered presentations and contributions from real estate investment consultants and valuers including including Victor Adekunle Alonge, board member and chairman, Professional Practice Committee (PPC), Estate Surveyors & Valuers Registration Board of Nigeria; Akingbade Tunji of Akingbade & Associates; Aigbekan Osas and Obi Mkparu, a real estate investment consultant amongst others.

AMCON was established in 2010 as a resolution vehicle to purchase the non-performing loans from banks, inject liquidity into the banks and subsequently recover the purchased bad loans. Over the last eight years of existence, AMCON has successfully stabilised the Nigerian banking sector by restructuring and collecting some of these loans. What is outstanding on its portfolio at the moment are hardcore debts, which the corporation is doing everything within its powers to settle as quickly as possible.