Oil firm, 11 Plc, formerly known as Mobil Oil Nigeria Plc, has increased its real estate portfolio as it finalised talks to acquire Lagos Continental Hotel. The company made the announcement after discussion on the property with the Asset Management Company of Nigeria (AMCON) was concluded.
Why 11 Plc acquired the hotel: 11 Plc, in a statement published on the Nigerian Stock Exchange (NSE), said the hotel asset would drive the growth of the company’s revenue against the fuel margins, which it said had remained stagnant in the market for several years.
The acquisition of Lagos Continental Hotel (for an undisclosed amount) is in line with 11 Plc’s diversification plans. The company has geared towards real estate for alternative revenue sources. The company said it “owns several prime properties in its real estate portfolio rented to blue-chip tenants.”
It added that, “Fuel margins in the industry have remained stagnant for several years in the highly competitive and regulated industry. We anticipate that this asset will contribute positively to earnings and underlines the faith of its stakeholders in the future of the Nigerian economy.”
11 Plc’s next plan: The company now plans to partner international brand to provide the luxury apartment service, as well as raise the standard of Lagos Continental Hotel from its current condition. And to do so, 11 Plc said there would be a need for significant investment to renovate Lagos Continental Hotel into a top brand in the hotel service market.
“We assure our numerous stakeholders that we remain committed to delivering outstanding value and robust returns in the years ahead. However, in the short term, cash flow and earnings before interest, tax, depreciation and amortisation could be under strain as a result of funds needed to renovate and upgrade the hotel to attract a 5-star branding.”
What will happen to hotel staff? After every acquisition or merger, anxiety always takes up spaces, leaving workers of the acquired company like Lagos Continental Hotel wondering their future at the company. To dispel any fear of sack, 11 Plc “assured the employees of the hotel that they would be treated with the utmost dignity and respect during the transition and sought their cooperation to make the takeover a smooth one.”