Transcorp Hotels Seeks for N10bn to Enhance Operations
Hospitality industry giant, Transcorp Hotels Plc has commenced shopping for N9.999 billion from existing shareholders via a rights issue of about 2.659 billion ordinary shares of 50 Kobo each at N3.76 per share.
The rights issue is being made on the basis of seven new shares for every 20 shares held as at 13 July 2020. Shareholders of the company had last June approved the right issue at an extra-ordinary general meeting (EGM) in Lagos, while United Capital Securities Limited last July formally applied for the rights issue.
Speaking at the EGM, the Chairman of Transcorp Hotels Plc, Mr. Emmanuel Nnorom said: ‘”This approval and endorsement of shareholders empowers the Board and management to look to the future with confidence despite the current harsh operating environment.”
Also speaking at the EGM meeting, Managing Director/CEO of Transcorp Hotels Plc, Mrs. Dupe Olusola, said: “Our track record of excellent service delivery has positioned us as the first choice for international and local guests alike noting, we are not resting on our oars but working round the clock to innovate new products and services to further delight our guests, notable of such is the launch of asset-light strategies to deepen our hospitality footprints across Africa.”
According to her, the world has been greatly impacted by the COVID-19 pandemic, with the hospitality industry being one of the hardest hit.
“However, we are optimistic about a great recovery for the sector and your approval today shows that you also share in this mindset. We will continue to play our part in ensuring a significant recovery to the Nigerian hospitality industry,” Olusola said.
In the same vein, a non-executive director of the company, who also represents the Ministry of Finance Incorporated on the board, Mr. Alexander Adeyemi, said: “Given the challenging times the hospitality industry faces, it has become critical to inject funding into the business for a stronger balance sheet. Transcorp Hotels has maintained a history of excellent performance in the hospitality industry, and this is a bold step towards the achievement of its long term goals.”
The management of Transcorp Hotels Plc recently announced that it would be taking steps to ensure business continuity due to losses recorded a result of COVID-19 pandemic.
To this end, the hotelier said it would diversifying its portfolio and reducing its workforce as part of its cost management initiatives.
“We activated various cost-saving initiatives such as renegotiations of service contracts and restructuring of our loans… Despite undertaking these, it has become apparent that more fundamental changes need to be made for the business to survive,” Olusola said.