AMCON battles economic difficulties to repay N5.6trn bond obligations

THE Assets Management Company of Nigeria (AMCON) is battling with the challenges of economic difficulties including decline in crude oil prices in its efforts to repay N5.6 trillion bond obligations to banks.

Managing Director and Chief Executive, AMCON, Ahmed Kuru disclosed this at an interactive session with journalists in Lagos yesterday.

He said that AMCON is expected to pay up N5.6 trillion of the funds raised through bond issuance over the next 10 years but it is finding it difficult to get enough money to pay up.

He explained that banks which contribute 70 per cent of the AMCON sinking fund is growing at about 12 per cent which is less than the 20 per cent projected growth.

Banks are contributing 0.5 per cent of their balance sheet into the AMCON sinking fund but Kuru says that the contribution of banks to the sinking fund is going to fall short of expectations this year.

The bad bank he explained is also faced with the challenges created by the dwindling oil price. According to him, the low price of crude oil at the international market is affecting its ability to sell off some of its assets and pay up on its obligations.

Kuru explained that decline in price of crude in the international market has affected the valuation of some of the assets which it is holding. With over 30 per cent of its assets being in the oil and gas sector, he said “we all know what is happening to the price of crude, what it does is that it affects the price of the assets that we are holding.”