11 Plc, formerly known as Mobil Oil Nigeria Plc, says it has finalised discussions with the Asset Management Company of Nigeria to acquire the Lagos Continental Hotel.
The company said in a statement filed at the Nigerian Stock Exchange on Monday that the acquisition was subject to terms and conditions between both parties.
11 Plc, which currently owns several prime properties in its real estate portfolio rented to blue-chip tenants, said it aimed to diversify its interests, given a challenging environment in the downstream sector of the petroleum industry.
According to the statement, the new asset will require significant investment to raise standard from the current state to the level consistent with similar facilities in major cities around the world.
It said, “Fuel margins in the industry have remained stagnant for several years in the highly competitive and regulated industry. We anticipate that this asset will contribute positively to earnings and underlines the faith of its stakeholders in the future of the Nigerian economy.
“We assure our numerous stakeholders that we remain committed to delivering outstanding value and robust returns in the years ahead. However, in the short term, cashflow and earnings before interest, tax, depreciation and amortisation could be under strain as a result of funds needed to renovate and upgrade the hotel to attract a 5-star branding.”
The company also assured the employees of the hotel that they would be treated with the utmost dignity and respect during the transition and sought their cooperation to make the takeover a smooth one.