Export Development Canada (EDC) has warned the Economic and Financial Crimes Commission (EFCC) and shareholders of Arik Air against interfering in the sale protocol of CRJ 1000 aircraft currently in the hangar of the local airline.
In a memo to the EFCC, EDC stated that they own the asset and rights to its disposal. The firm also rebutted earlier ownership claims by Arik Air’s shareholders.
Recently, the crisis rocking Arik Air took another turn after the sale of one of its assets – a CRJ 1000 aircraft with registration number 5N-JEE (before it was deregistered by the Nigeria Civil Aviation Authority (NCAA).
The aircraft, which was last flown in 2019, was sold by its owners, EDC and JEM Leasing Limited, to a foreign buyer, Alberta Aviation Capital Corp for $1.5 million. Alberta Aviation has decided to tear down the plane so as to earn higher value in return.
Apparently sad by the development, the stakeholders of Arik Air denied JEM Leasing’s assent to the sale and subsequently called for criminal investigation of the auction, which made EFCC arrest and interrogate current managers of Arik Air (in Receivership).
In a letter to the EFCC dated June 16, 2023, and signed by its Principal Special Risks Officer, Brian Craig, EDC affirmed that JEM Leasing Limited owned the aircraft, and EDC financed in part the owner’s purchase of the aircraft.
Craig noted that as a condition to that financing, the aircraft was mortgaged to EDC and added that the aircraft remains mortgaged to EDC. In another letter, JEM Leasing has entered into an agreement with Alberta Aviation Capital Corp. (the Buyer) to sell the aircraft.
EDC stated: “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 (Alberta Aviation) from having access to the aircraft.
“We also understand that certain press reports allege that the owner (JEM Leasing) has dissociated itself from the sale of the aircraft to the buyer and the plan to tear down the aircraft, and called for an investigation into “this asset destruction” and “the claims of Arik Air” in relation to the aircraft.
“As is clearly shown by the Owner’s Letter, these allegations are untrue: the Owner has confirmed that it has agreed to sell the aircraft to the buyer, that the buyer is authorized to tear down the aircraft, and that Arik Limited 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 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 transactions outlined in the Owner’s Letter,” the memo read in part.
Arik Air is the launch customer and sole operator of the CRJ 1000 in Africa. Since 2014, Arik Air, as the lessee operated the aircraft, pursuant to a lease agreement with JEM Leasing Limited. Arik has not used the plane since 2019. In 2022, EDC approached the NCAA to deregister the plane from the Nigerian registry.
In a letter of confirmation signed by its director, Phillip Hinds, JEM Leasing stated that the acquisition of the aircraft by the owner was financed in part by EDC. Pursuant to that financing, the aircraft was mortgaged in favour of EDC.
Part of the confirmation letter read: “There were numerous, substantial and continuing defaults (including non-payment of numerous rental amounts due under the lease) by Arik in the performance of its obligations under the lease.
“The owner granted extensive periods of grace to Arik in order to give Arik the opportunity to remedy those defaults. The defaults were not remedied and, accordingly, on 20 June 2022 the owner terminated the leasing of the aircraft under the lease, in accordance with the terms of the lease.
“Accordingly, neither Arik nor any person claiming through Arik has any title to, interest in, or right to use or possession of, the aircraft (or any part of the Aircraft, including its technical records).”
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