By Babajide Komolafe
Two months after it commenced operations the Asset Management Company of Nigeria (AMCON) has acquired N1.036 trillion bad debts of 21 banks.

Yesterday, the company held a completion board meeting where it signed agreement with 21 banks to issue N1.036 trillion worth of bonds to purchase their bad debts.

The agreement covers purchase of all the bad debts of eight rescued banks and the margin loans of   13 non-rescued banks. The rescued banks are  Afribank, Bank PHB, Oceanic Bank,  Union Bank, Intercontinental Bank, Finbank, Equitorial Trust Bank and Spring Bank.

The  non-rescued banks are  Wema Bank, Bank of the North, UBA, First Bank, Sterling Bank, Skye Bank, Guaranty Trust Bank, Zenith Bank, Access Bank,  Ecobank, Fidelity Bank,  and Diamond Bank.

Speaking at the completion board meeting, Chairman of AMCON, Alhaji Aliyu Kola Belgore said, “We are making history in the world today, succeeding where many have failed, or not even dared to try. AMCON has within record time, come up with a programme resulting in today’s event-which in particular will help in shoring confidence in our banking system, re-invigorate the Nigerian capital market  and improve the soundness of the financial system and Nigeria’s sovereign credit rating.”

The N1.036 trillion bonds issued by AMCON to purchase the bad debts are known as Consideration bonds and are for the purpose of purchasing margin loans of all the banks and the other non-performing loans of rescued banks before the December 30th deadline.

In the second phase the corporation will issued N3 trillion worth of bonds known as Proper Bonds, part of which would be used to replace the Consideration Bonds issued in the first phase. These would be issued on or before January 31st 2011.