Nigeria's Transcorp Hotels raises NGN 4.2B (USD 23M) from IPO

Transcorp Hilton Abuja, Nigeria

Transcorp Hotels has raised NGN 4.2B (USD 23M) from its recent initial public offering (IPO), indicating a 52 percent subscription level.

Transcorp Hotels was targeting to raise NGN 8B, offering 800 million shares at NGN 10 per share. Transcorp Hotels had made the IPO open to the investing public between September and October 2014.

Although Transcorp Hotels was unable to raise its full target amount, market analysts said that, given the bearish trend in Nigeria’s capital market in the last quarter of 2014, the result of Transcorp Hotels’ IPO indicated a high level of confidence by investors in the company.

“Given the high rate of decline the market suffered in the last quarter of 2014 and the general low investor confidence, Transcorp Hotels raising NGN 4B is highly commendable. It shows the high level of confidence investors have in the board, management, and future of the company,” Mike Ezeh of Crane Securities Limited said.

Transcorp Hotels has stated that it will use the IPO proceeds to finance expansion projects, specifically the construction of two new flagship hotels in Ikoyi, Lagos and Port Harcourt.

Speaking on the IPO results, Transcorp Hotels’ Managing Director, Valentine Ozigbo, said that Nigeria’s hospitality industry is experiencing significant growth, with major demand for expanded capacity and enhanced quality and service.

“Transcorp Hotels is ideally-positioned, as the owner of the largest number of hotel rooms in Nigeria and a partner with one of the world’s most prestigious hotel brands, Hilton Worldwide, to leverage this demand. The proceeds of this offer will be used to fund the development of two new Transcorp Hilton hotels, one in Ikoyi, Lagos, and the second in Port Harcourt, with both due for completion in 2017. We are delighted to be able to offer the Nigerian public the opportunity to participate in our future success. This offer reiterates our commitment to creating sustainable value for all stakeholders,” Ozigbo said.

Ozigbo added that the Nigerian hospitality industry is fast becoming more competitive, given the increased presence of international brands in recent years. He assured investors that Transcorp Hotels has a strong brand and success story.

“We have a strong brand and success story in Nigeria as well as good long term relationships with established suppliers in Nigeria. These factors, coupled with our partnership with Hilton Worldwide for management of our facilities, opens up a large opportunity for our proposed developments in the high density areas of Nigeria to attract a considerable portion of business travel and tourist traffic which should translate to adequate guest patronage,” Ozigbo said.

Source: Transcorp Hotels raises N4.2bn from Initial Public Offering – Nigeria Business News – Nigeria Business News.

Recommended