Monday, April 26, 2010

Jimoh Ibrahim stakes $250m - Acquires Virgin Nigeria

News reaching us from Guardian Nigeria by Wole Sadare on the Acquisition of Virgin Nigeria.

THE recently announced acquisition of Nigeria Eagle Airline (formerly Virgin Nigeria Airline), may have cost NICON Group of Companies $250 million (N37 billion), under a debt buy-over deal sealed with United Bank for Africa Plc (UBA).
The amount represents Virgin Group's indebtedness to the bank, which liability has now been taken over by Jimoh Ibrahim-led organisation.
There were however, indications in the aviation industry yesterday that Captain Dapo Olumide, who was introduced by Ibrahim as being retained as Chief Executive Officer of the acquired airline, may quit the position this week.

Ibrahim had announced the retention of Olumide as the helmsman of the airline at the weekend, citing the confidence reposed in him by the board of directors for the decision.
Already, industry operators had expressed mixed reactions over the airline's acquisition, given the antecedent of Ibrahim. He acquired EAS Airlines but shortly, on his own, wound up its operations.
Ibrahim is expected to assure workers of his plans to consolidate on the success of the airline as driven by the Olumide-led management, at a briefing slated for today.
A very reliable source told The Guardian that Olumide was already planning his exit from the airline, stressing that the decision was personal to him.

Efforts to reach him yesterday proved abortive as his mobile phones were switched off.
It would be recalled that the airline was indebted to UBA to the tune of $250 million, a debt reportedly incurred by the Virgin Group.
A source in UBA told The Guardian that to them, it was an economic decision they took by transferring the risk to the new owner.
"We are disturbed that there were claims in the media that Jimoh Ibrahim paid $100 million to acquire the airline", said the UBA source.
Olumide is an aviation professional and a trained pilot with over 28 years experience, having started his career after he earned a Bachelor of Science degree from Embry-Riddle Aeronautical University in Florida, USA in 1980.
He joined Aero Contractors in 1982 and following many successful years, he was appointed the Deputy Managing Director in 2002 and transformed the original company vision from an exclusively B2B model to the more demanding and more modern B2C approach.
He joined Virgin Nigeria in November 2008 as the Chief Commercial Officer, after a brief stint as a banker with the Africa Finance Corporation (AFC), specifically in the area of transport infrastructure project development.
Before his current appointment as the chief executive officer, he was the Company's Deputy Managing Director with oversight responsibilities for Commercial Planning, Sales and Marketing, Cargo and Corporate Aviation.
Captain Olumide is a change manager and within a short time in the helms of affairs of the airline, brought his expertise to bear by turning the fortunes of the airline around especially by initiating and implementing policies that have brought the airline from the doldrums especially during the turbulent economic recession that adversely affected global aviation business.
Also, he led the management team that created an indigenous and unique brand for the airline, which has made the airline to remain a force in the domestic and regional markets.
He initiated code share with Kenya Airways, Ethiopian Airlines, Delta Air and signing technical service with Ethiopia, the first in West Africa with another African profitable airline.
Speaking to reporters yesterday, former spokesman of Nigeria Airways, Chris Azu Aligbe said he found it "difficult to begin to say what will be the consequence of the airline's acquisition, because you don't know who is coming, but all I need to say is that Olumide and his team, they have done wonderfully well. They met a very bad situation and they have battled all their lives to salvage that situation.
"If it were not for the albatross of the debts accumulated by Virgin Group, the Nigerian Eagle would have stood out clearly, showing that people who know what they are doing are in place; they have a good roadmap and they were battling to stay on that road map.
"That roadmap comes along the line of national aspiration to have a world standard airline that can compete and gradually moving up from domestic and regional dominance to the point where it should be. It's quite sad that this has happened".
On Ibrahim's antecedents regarding the way he allowed EAS to die shortly after acquisition, Aligbe said people are apprehensive because of that, noting that everybody was shocked when it was bought, adding that people believed it was going to be revived, "but it just died that way and not even a word was said about it".
He however, stated that people had every reason to be apprehensive but quickly noted that Ibrahim would not invest that amount of money in such a place and allow it to go down the drains.
His words: "He is a businessman, even if the money fell from the skies to him as manna from heaven, I am sure that he does not intend to throw it away; that is my own submission, I may be wrong. I will be shocked if I find that I am wrong. I think that having invested, his sole business is to have an airline functioning and coming back after the EAS debacle, coming back to buy over another airline, airline that is major; I think it shows that he has an intention to own an airline that will work, but what people are afraid of is that he does not stand on the wrong footing"
Another aviation expert, Captain Dele Ore, said: "Whatever you are telling me is all speculative and what I am reading in the newspaper is worrisome. But I want to know how much money that has been injected into the place and by whom.
"The track record that is on ground should make us very, very worrisome. Why is EAS (NICON Airlines) no more flying? If it is an on-going business and it is flying, it can merge with a new one. Then you are thinking of a merger and we can understand that. As it is now, another dead company is in the offing".
He disclosed that Nigeria Eagle is the best run airline in Nigeria, which has met IOSA (IATA Operational Safety Audit) requirements. It is the only company in the industry that has met IOSA.
"To me, that is an airline that is qualified to be an airline in Nigeria. So if Olumide was able to sustain and maintain it, we should say that we commend his effort. If he leaves, nobody is indispensable, but it will be a very sad story and we will be going in circles and that airline will be worse off for it".