Silverbird cinemas takes the credit for reviving Nigeria’s cinema culture and taking it to a new level. Because of this, they have a special place in the hearts of Nigerians.
This morning, however, we woke up to the news that Silverbird assets belonging to its 3 companies – Silverbird Productions, Silverbird Showtime, and Silverbird Showtime and Silverbird properties in Lagos, Port-Harcourt and Abuja have been taken over by the Asset Management Corporation of Nigeria (AMCON) as a result of debts owed said to be about N11 billion.
First off, how did Silverbird get here?
Between 2005 and 2007 loans were gotten from Union Bank for the purposes of building the cinema chain, but those loans eventually became classified as ‘non-performing loans’ (NPLs) as a result of the inability of the Bruces to service them.
In order for the bank to continue operation, those loans and other NPLs were sold to AMCON – set up in 2010 for that purpose – at a discount. This happened in 2011.
Still, the Bruces did not service the loans, and after several notices, AMCON got a court order to take over Silverbird property. The matter is even more interesting because Ben Murray-Bruce is said to have given a personal guarantee backing the loans, meaning that his assets can be used to service them.
Then there is this tweet.
What happens next?
We can also draw some conclusions from AMCON’s past interventions.
In the case of Aero Contractors, the management of the airline was replaced in February this year. This is likely to be what happens, given that Silverbird employs a significant number of people as well.
So, you will likely be able to watch movies at Silverbird again soon, just under different management.
The broader issue is that in general, Nigerian business owners have a big problem meeting their obligations. Staff, suppliers, even banks, frequently go unpaid, while those who took these loans live large, with no apparent sense of how their actions affect many more people.
The non-performing loans owed banks by Bruce and many of Nigeria’s biggest businessmen put the very existence of these banks at risk, along with thousands of jobs. Thank God for AMCON.