By Gabriel Omoh, Business Editor
ASSETS Management Corporation of Nigeria, AMCON, said it would issue N3 trillion worth of debts to purchase the non-performing loans of banks.
The corporation, however, said there was no going back on the December 30 deadline for the purchase of the debts. It also warned banks against over-valuation of the non-performing loans or misinformation and misrepresentation in their dealings with it, stressing that the board of directors would be held responsible for such practices.
Managing Director/Chief Executive of the Corporation, Mr. Mustafa Chike-Obi, who stated this at an interactive session with chief executives of banks, explained that AMCON had a mandate to purchase all the non-performing loans of the 10 rescued banks by December 30 as well as the margin loans of all the other banks.
He said achieving this was the immediate priority of the corporation, adding that there would be no going back on that deadline.
Chike-Obi noted that this would be achieved by issuing bonds which would be exchanged for the bad debt of banks.
Explaining the process of the purchase of the non-performing loans, the corporation’s Executive Director, Finance and Operations, Mrs Dosunmu Folake, said N3 trillion worth of bonds would be issued in two phases to purchase all the non-performing loans of banks.
She said the corporation would issue in the first phase N1 trillion worth of bonds to be known as Consideration Bonds, noting that these were for the purpose of purchasing the merging loans of all the banks and the other non-performing loans of rescued banks before the December 30 deadline.
Dosunmu said the corporation will issue N3 trillion worth of bonds known as Proper Bonds, in the second phase, stressing that part of it would be used to replace the Consideration Bonds issued in the first phase. She added that these would be issued on or before January 31, 2011.
She explained that the N3 trillion Proper Bond had zero interest rate, was tradeable and would be listed on the stock exchange.