Chams Plc. (“Chams or the Company”) issued a press release explaining why it has decided to shut down the operation of its Chams City Digital Mall, Ikeja, Lagos. The mall was at a time dubbed the “largest Cyber Cafe in the world” offering over 1,000 computers. However, things didn’t go well as the world went mobile leaving Cyber Cafe and any busines that relies solely on PC’s to thrive to die a natural death. This has now cost Chams a whopping N9.2 billion in losses leading them to issue this Press release.
The company built the mall on the back of a concession agreement with the National Identity Project which as we all know was fraught with all sorts of controversies. The press release also suggest the company relied heavily on Government business incurring a whopping N9.2 billion on a project that in hindsight should not have been embarked upon.
We believe this is a huge lesson for shareholders who sit back and allow companies take on un-calculated risk especially in an industry that is dynamic and susceptible to disruption.
Here is the press release below
According to the Company, the facilitate was built for the National ID Project but the National Identity Management Commission (NIMC) called off the concession agreement which the parties signed in 2010, 5 years into the deal leading to a loss of about N9.2 billion of shareholders’ fund. Chams has made provisions for this huge loss over the past few years between 2009, 2010, and 2011 with the company returning to profitability from 2012 to date. Meanwhile, the Company is in arbitration over the dispute on the issue.
The Company stated that Chams City will now focus more on its ancillary services of Business Process Outsourcing (BPO) such as contact centre services, computer-based testing, pre-qualification employee tests and staff training at its new location in Victoria Island, Lagos.
As part of the effort to improve shareholder value Chams Plc. is fully involved in the implementation of the ongoing Bank Verification Number project (BVN) and is also working on a number of other identity management-related projects. The company recently launched the ConfirmMe verification service platform which has been well received by the market. ConfirmMe is a robust Credit, Credential and Identity verification platform that offers verification services to both individuals and corporate organizations in Nigeria and beyond.
Chams Plc. is positive that with the innovative products mentioned above (developed in-house by its team of software developers) the financial horizon of the company for 2015 would be rewarding to its shareholders and other stakeholders.