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Nigerian Eagle Air

Nigerian Eagle Airlines to sell equity, reorganize debt

Vivian Salama  Apr 12, 2010

Nigerian Eagle Airlines, which is 49 percent owned by Virgin Atlantic Airways Ltd., plans to sell equity and reorganize its debt in a transaction worth about $450 million, said Ernst & Young LLP, which is advising the company.

The deal will be completed by the end of the northern hemisphere summer, Zemedeneh Nagatu, a managing partner at Ernst & Young, said in an interview in Sharm el Sheikh, Egypt today. A number of investors and companies have shown interest in buying the stake, all of which are based in Nigeria, he said. Investors are seeking new opportunities in Africa’s aviation industry, which currently accounts for 5 percent of global air traffic. Direct flights between Africa and major overseas markets climbed by more than 11 percent last year even as the global airline industry scaled back flights to combat financial troubles, according to Innovata LLC.

“Nigeria is one of the more established democracies, risks are manageable,” Nagatu said. “The pay offs are substantial.”

Nigerian Eagle changed its name from Virgin Nigeria in September. Nigeria is Africa’s second-largest economy after South Africa and the continent’s most populous nation. “What happened in Africa is there have been a huge number of airline failures, primarily because of poor governance,” said Nagatu. “A lot of governments interfere in the day-to-day running of airlines, but now these initiatives are now being driven from a private sector perspective.”

Nigerian Eagle Airlines to sell equity, reorganize debt
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Source: Bloomberg

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