(Updates with comment from CEO in third paragraph)
Oct. 20 (Bloomberg) -- Asset Management Corp. of Nigeria, a state-owned company that buys non-performing debt from lenders in the West African nation, said it will complete its acquisition of bad loans by Oct. 31.
Amcon, as the company, is known, will have bought 2.8 trillion naira ($18 billion) of non-performing loans from 21 banks at a cost of about 1.2 trillion naira by the end this month, Chief Executive Officer Mustafa Chike-Obi told reporters today in Lagos, the commercial capital.
Amcon also bought loans that, while performing, were considered a “risk,” including 275 billion naira owed to lenders by three Nigerian companies, he said.
Nigeria established Amcon last year as part of measures to shore up the country’s banking industry after a debt crisis in 2008 and 2009 threatened to collapse some lenders. The central bank fired the chief executives of eight of Nigeria’s 24 banks for their role in the crisis and bailed the lenders out with 620 billion naira.
Afribank Nigeria Plc, Bank PHB Plc and Spring Bank Plc, which were deemed unable to meet a Sept. 30 recapitalization deadline, were nationalized on Aug. 5 and transferred to Amcon’s control. Five others were acquired by investors before the deadline.
Amcon renamed the nationalized lenders and injected 736 billion naira to allow them to meet capital-adequacy requirements, Chike-Obi said. Another 1.4 trillion naira was spent to bring the net-assets value of the five lenders that were acquired by investors to zero, he said.
“Amcon will in the next 10 years focus on the recovery and restructuring of the acquired assets.”
--Editors: Emily Bowers, Nasreen Seria.
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