Transcorp issues N9bn bond to upgrade facilities, build new hotel

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From Isaac Anumihe, Abuja

Transcorp Hotels, at the weekend,  issued a  total of N9.758 billion to finance the upgrade of its facilities.
This is  the second tranche in its N30 billion medium term bond programme registered with the Securities and Exchange Commission (SEC)
Speaking to newsmen, the Managing Director and Chief Executive of the hotel, Mr Valentine Ozigbo, said that the proceeds of the issue would be used to finance the upgrade of the company’s flagship hotel, Transcorp Hilton Abuja, and other buildings, including construction of a 5,000 seater multipurpose banquet centre.
Recall that last year, during its Annual General Meeting (AGM), Ozigbo said that management would expand to some highbrow areas of the country.
“Notwithstanding the challenges we faced in 2014, we are excited and optimistic about the long term outlook of the hospitality industry in Nigeria and the position of Transcorp Hotels in this industry.” he said, adding that the company would over the next five years engage in phased approach in developing high-end hotels in Ikoyi, Port-Harcourt, Ikeja and Warri including a convention centre and apartment complex in Abuja.
According to him, the company would also leverage on the Transcorp Hilton’s  brand and strong customer base to provide excellent guests experience and achieve superior returns from the new assets.
He said the Transcorp Hilton,  Abuja,  would be upgraded to completely transform existing facilities and amenities and position it as clear leader in Nigeria’s hospitality industry. Ozigbo said, despite the bearish state of the stock market, it was able to raise N4.18 billion, representing 52 per cent of the N8 billion offer from its recent Initial Public Offer,  adding that  the company would also acquire additional funding in the short and medium term to enable it execute its expansion drive.
“To this end, we will be implementing a robust funding strategy which includes the use of debt (bank and bonds), equity (third party participation) and quasi-equity over the next one to three years.” he said, adding that N316 million was donated by the company to the Internally Displaced Persons’ Fund as part of a private sector-led initiative to support relief measures to the victims of the security crises in the northern part of the country.
“The  transaction is a five-year fixed-rate bond, due in 2020. The subscription is in addition to a prior issue of N10 billion, being Series 1 in a Senior 7-Year 16.00 per cent  Fixed Rate (Unsecured) Bonds Due 2022 issued in October 2015. With this, the total amount the company has successfully raised to date is N19.758 billion.

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