Transcorp Hotels IPO Already Oversubscribed

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VENTURES AFRICA – Valentine Ozigbo, the Chief Executive Officer of Transcorp Hotels Plc (THP) says the ongoing initial public offering (IPO) issued by his company is fast becoming oversubscribed and will translate to consistent revenue growth in the next three years.
“The company will be growing very fast in the next couple of years and this will obviously be positive for capital appreciation and dividend payouts for our shareholders,” Ozigbo said, adding that the growing demand for hotel especially in the under-served Lagos market will fuel this growth.
Transcorp Hotels is currently offering 800 million ordinary shares of 50 kobo at N10 each, an offer that will close by October 17, after which the
company intends to list on the Nigerian Stock Exchange. Proceeds from the ongoing IPO will be used to build a series of five-star hotel, upper-market and middle-market properties in Nigeria.
The pilot phase of this project will be built in Lagos and Port Harcourt at a cost of $140 million (N22.4 billion) and $100 million (N16 billion), respectively. The hotels which will be operated by Hilton will commence operations by the year 2017.
“The designs for the 300-room Lagos hotel – to be built in one of Lagos’ high-brow areas, Ikoyi – are done and we have just received approval from the state for construction to begin. We are hoping for approval for Port Harcourt to come by year end,” Ozigbo said.
In Abuja, Transcorp plans to build a 5,000-capacity multipurpose convention and conference facility and 200 unit apartments within
its 20 hectare facility. “There is the need for Abuja to become a true conferencing centre in Africa,” Ozigbo said.
Transcorp Hotels, a subsidiary of Transnational Corporation of Nigeria, is the largest local luxury hotel operator in Nigeria. It plans to be the top hospitality company in Africa, creating maximum and sustainable value for stakeholders. According to Ozigbo, “Nigeria’s hospitality industry is experiencing significant growth, with major demand for expanded capacity and enhanced quality and service.”
He believes the hotel brand “is ideally positioned, as the existing owner of the largest number of hotel rooms in Nigeria, and partnered with one of the world’s most prestigious hotel brands, Hilton Worldwide, to leverage this demand.”
Despite the growing security challenges in the northern part of the country, Nigeria’s burgeoning population of about 170 million people and its economic growth averaging 7 percent yearly (World bank est.), has made it an attractive investment spot for investors.