Transcorp Hotels seeks N10bn from capital market to fortify operations

Omobayo Azeez

In the light of Coronavirus pandemic incursion that has left the hospitality industry as one of the most hit sectors, Transcorp Hotels Plc has moved to raise N10 billion from the capital market to fortify its balance sheet.

At the recent Extraordinary General Meeting (EGM) of the company, its shareholders gave their nods to the proposal, authorizing the company’s board to go ahead and issue 2,659,574,468 ordinary shares of 50 kobo each by way of a rights issue to the shareholders.

This is based on seven new ordinary shares for every 20 ordinary shares of 50 kobo each held at a price of N3.76 per share, the company disclosed on Tuesday.

According to the company, the shares will be issued from the authorised share capital of the company which is currently at N7,500,000,000 comprising of 15,000,000,000 ordinary shares of N0.50 each, and the resultant issued and fully paid-up share capital will be N5,129,989,184 consisting of 10,259,978,368 ordinary shares of N0.50 each.

Emmanuel Nnorom, the chairman of Transcorp Hotels Plc noted that ‘”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 meeting, Dupe Olusola, managing director/CEO of Transcorp Hotels Plc also welcomed the approval adding that the company’s track record of excellent service delivery has positioned it 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,” she said.

Olusola further noted that 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,” according to her.

Alexander Adeyemi, a non-executive director of the company, who also represented the Ministry of Finance incorporated on the board, 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,” he said.