The insurance sector is in dire need of Fintech to ensure its products penetrate the un-insured population and fast track the process of claim payments in Nigeria.
This was disclosed by the Chief Executive Officer, LASACO Assurance, Segun Balogun, in an exclusive interview with Nairametrics.
According to Balogun, the Coronavirus pandemic brought enormous pressure on the insurance sector and that of the company. He explained that the various lockdown measures for the effective prevention of the spread of the disease led to a decline in economic output, income, and consumer spending. Excerpts:
Some operators have described the insurance recapitalisation exercise as a great de-service to the sector. What is your take on this?
If not for the timing of the intervention or the eruption of this pandemic, recapitalisation is not a de-service to the insurance industry in Nigeria. The focus for recapitalisation is to enhance the capacity of all the industry players such that it will make us retain more of the revenue of the risk that we all participate in Nigeria than taking so much out of the shore of Nigeria that we do currently, especially in the area of high capacity risk such as Aviation, Oil and Gas, Energy as well as the insurances of major Power Plants. Rather than being a de-service, recapitalisation in itself is an enhancement of capacity which is good for the growth of the sector and it’s a tool to improve penetration.
Do you also think the exercise period is short, probably a three-year plan will be better?
The timing is not too short, considering the revision that has been made currently by the regulator giving the staggering period for compliance to 31st of December, 2020 to 31st of September, 2021. But for the current situation, where most foreign investors are withdrawing their funds from the local economy, affecting business performance due to the pandemic may call for a further review of the recapitalisation exercises.
How far are you to deadline?
We have increased our authorized share capital to N20 billion to accommodate new investments, in line with the recapitalisation in the industry. We engaged the services of financial consultants who are working hard to conclude the necessary regulatory protocols. LASACO will meet the new capital requirement, as there are various options open to the Company.
How would you rate the Nigerian insurance sector in Africa, how far is it to South Africa, and how would rate foreign investors participation?
We can make an inference from the participation of some South African companies in Nigeria, and we currently don’t have the same reciprocity of Nigeria Insurance companies operating over there.
Nigeria looks presently like that bride, we have the market, but the capacity is not adequate. One of the advantages the recapitalisation would bring is enhancing capacity such that some of our insurance companies would be looking to take comparative advantage to establish a presence in other economies in Africa. But we are not far back, in terms of skills and competence. In Nigeria, we have competent insurance professionals and business managers. They can also run the businesses across borders.
Most of the shares of insurance firms listed on the Nigerian Stock Exchange are penny stocks; many have not paid a dividend in about ten years. What are the factors responsible for this development?
There are numerous factors responsible, but I would say the shares of insurance firms listed on the Stock Market are majorly affected by perception and the level of awareness of insurance brands amongst the investing public. This is because if you critically review the performances of most of these insurance companies listed on the Stock Market, it’s not as though they are not running profitably, but the value of these stocks and ROI’s as far as the investors’ mind are concerned may be a significant consideration in determining how much they will be willing to commit to that industry. As bleak as it may seem, some of the players in the insurance industry are not doing badly in the Stock Market.
Fintech is the way to go now. How do you think the sector can explore opportunities in the Fintech space?
With my appreciation for technology, it’s a must for Fintech to be adopted in the insurance sector. It has worked for many other industries and businesses. It would help increase the rate of insurance penetration as choosing an instrument such as Fintech would place the operations of insurance in the hands of consumers placing the purchasing of insurance and processing of claims to be at the palm and the comfort of consumers.
Insurance penetration is rated at about 0.5%. Considering the nation’s population, what needs to be done to close the gap?
Despite the current low rate of insurance penetration in Nigeria, the sector has enormous growth potential, considering the country’s favourable demographics. With a population of around 180 million people and the potential upward mobility of substantial segments of the country’s populace, a boost in the insurance penetration will increase the insurance industry’s contribution to Nigeria’s GDP.
The industry players need to break insurance down to the language that can be spoken and understood by the common man on the street who presently feels insurance is not meant for him/her. When there is any incident or accident, Nigerians tend to rely on family and community to come to their rescue. Also, when someone dies, it takes the effort of all of the family and community to rally round to provide ordinary burial expenses. As a result, the industry players need to speak to these needs and create bespoke products that can attend to these needs and take it down to them in the grassroots.
Unfortunately, our concentration as an industry is more largely on governments, corporations and the elites. If insurance could be taken down to the low hub, then insurance penetration would soar up.
LASACO declared a dividend of 5kobo at your last AGM. What should your investors/shareholders expect in 2020?
Irrespective of the effect of the pandemic on the economy and our well thought out Business Continuity Plan; we will not renege in ensuring that the Company grows its revenue and profits. The controls that we have is over cost mostly and not income, but we are still engaging all relevant partners to ensure we get all our businesses renewed and participate in new ones.
One flip side of the pandemic is that notwithstanding the financial lag back that it will give businesses, the risks abound, and any viable business would ensure to protect their risks. The economy is gradually opening, and insurance is key to businesses. With these positive indicators, we are going to have a growth rate from what we achieved last year.
How is COVID-19 affecting your operations?
As expected, the outbreak brought enormous pressure on our businesses. The various Lockdown measures for the effective prevention of the spread of the disease led to a decline in economic output, income, and consumer spending. As disposable income is being affected, so will the demand for our services.
Our First Quarter Results showed an 11% reduction in revenue in comparison to the Year 2019 corresponding period, but our quick response to this reality is to manage down cost.
What is LASACO doing differently to keep it head above water, especially to survive COVID and its challenges?
Our first and swift response was to look at areas we have control over, which is the cost of operations. We have made a lot of adjustment in the field of management expenses because we are almost confident that once the cost is down, the available revenue would provide a good result. We have also upscaled our engagement with customers, especially our brokering partner, which is bringing a good result for us. Our half-year results showed a slight growth in revenue in comparison to the Year 2019 corresponding period.
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What should be the expectations of your clients, investors from LASACO in the next five years?
It can only be better. By our nag for quality, we seek to improve on the performance of our system continually. Part of our offerings to customers is to ensure prompt claim settlement – claims to be settled the same day after the discharge voucher is executed and submitted to us. We assure our customers to be quick in service delivery and seek to improve our promptness on service delivery and the quality of the products we offer.
For our investors, it will not be less. As good as the Company is performing, and as we seek to better it, the value that will come to them will be enhanced.
How Citizenship by Investment is offering wealthy Nigerians new global opportunities
Chief Executive Officer of La Vida Golden Visas chats with Nairametrics about Grenada CBI Programme, the opportunities in the country and more.
As more Africans look to expand their horizons in pursuit of global opportunities, Nairametrics caught up with Paul Williams, Chief Executive Officer of La Vida Golden Visas, one of the world’s leading Citizenship by Investment facilitators, to understand the surge in demand for dual citizenship in Nigeria and across the continent. Discussion points include the Grenada CBI Programme, the Kimpton Kawana Bay resort and the opportunities that lie in wait for High Net Worth Individuals and investors in the country.
We have seen an increasing trend of Dual Citizenship across the globe and most especially from Africa. Why now?
Whenever geopolitical issues arise in any country, we tend to see an increase in demand for second citizenship or residency. With so much uncertainty currently in the world, people are often looking for a ”Plan B”. More than ever before, there is an increased awareness of such programmes which is also driving the demand. Ten years ago, there were just a handful of citizenship by investment programmes available, but the industry has grown substantially in the last decade and there are now more than 80 investor visa options available across the globe. Africa’s affluent middle class are also becoming wealthier, giving them the opportunity and motivation to take part in citizenship by investment programmes.
What are the current challenges with the Nigerian passport?
As a standalone passport, Nigerians have visa-free travel to just 54 countries and territories worldwide. Many are other African countries such as Ghana and Ethiopia. When you break this down, Nigerian passport holders, shockingly, have access to just 2.1% of the world’s GDP or 3.1% of the world’s travel popularity. For HNWIs and business people from Nigeria this is very limiting and could be holding them back from various opportunities, restricting them with business, education and leisure.
How can Nigerians step up their Global travel?
Investing in a quality government-approved citizenship by investment programme will enhance your visa-free travel access dramatically, and in turn, open up other opportunities. For example, if you pair a Grenadian passport with a Nigerian passport, one will gain access to 163 destinations worldwide, which includes the UK, EU Schengen zone, China and Russia. Now you have visa-free access to 58.7% of the world’s GDP, a huge improvement on the 2.1% that a standalone Nigerian passport offers.
How do you apply for Grenadian Citizenship by investment (CBI) and what are the benefits?
Grenada’s Citizenship by Investment (CBI) is one of the world’s top ranked CBI programmes and allows individuals and their families to obtain citizenship in Grenada. It offers a user-friendly second citizenship and a first-class investment opportunity whereby applicants can buy Government-approved real estate from USD220,000 like a unit in the Kimpton Kawana Bay resort, which is currently the most popular project. An application for Citizenship by Investment in Grenada is fast, has low family fees, and no interview, education, language test or management experience is required. There are no residency requirements and dual citizenship is permitted. Once your passports are issued, you have visa-free travel to over 140 countries. Grenada does not tax worldwide income, wealth, gift, inheritance or capital gains.
How long does it take from investment to citizenship?
The government processing time is between 60-90 days from the date the application is submitted. La Vida’s in-house processing team will assist applicants with the entire process from start to finish, providing investors with a seamless and stress-free service.
What is the Grenadian Citizenship by Investment project and how does it work?
Kimpton Kawana Bay is a new beachfront 5-star luxury resort in Grenada. Title deeded studios and suites are for sale for the minimum investment of USD220,000 through Grenada’s acclaimed Citizenship by Investment (CBI) programme, which allows purchasers to apply for Grenadian citizenship for themselves and their family in one application. The resort is ideally positioned on Grand Anse Beach, voted by CNN and Condé Nast Traveller as one of the world’s best beaches. The resort will be operated by an internationally recognised hotel brand – Kimpton Hotels & Restaurants, part of IHG (InterContinental Hotels Group), one of the largest hotel groups in the world.
What are the benefits for investors at Kimpton Kawana Bay?
Kimpton Kawana Bay offers hassle-free ownership with no annual out of pocket fees. There is a projected rental income of 3-5% through the transparent revenue-sharing model and personal accommodation usage of up to 2 weeks each year. After 5 years you can disinvest and recoup your initial investment. The hotel will feature an infinity edge pool overlooking Grand Anse Beach, state-of-the-art gym and spa facilities, exquisite fine dining restaurant, roof-top bar, beach bar, lounge with terrace, and water sports facilities.
What does it cost and who is this best suited for?
Asides from the $220,000 investment in the Kimpton Kawana Bay project, investors will need to budget for the government’s application, processing and due diligence fees. For a single applicant, the total cost, inclusive of fees will be $306,000, whereas a family of four would be around $320,000, depending on the ages of the children. A typical Nigerian investor taking part in the programme could be a businessperson looking to extend their global reach, or an affluent middle-class family who may want to broaden their global opportunities, both for business and education reasons. It’s rare that applicants look to relocate to Grenada, and the beauty of the programme is that there is no requirement to do so.
Why should more wealthy Nigerians adopt a second Passport?
Visa-free travel, increased global business and education opportunities, creating a legacy for one’s family and having a ”Plan B” are just some of the many reasons investors take up second citizenship. Grenadian Citizenship offers several added attractions that many of its competitor countries do not. Grenada is one of the only CBI countries which has visa-free access to China and Russia. Grenada is also the only Caribbean CBI country to hold an E-2 Visa treaty with the USA. This means, once Grenadian citizenship has been granted, there is the opportunity to then apply for residency in the USA through business investment, should one wish to do so.
What is the E2 visa and why does it matter?
The E-2 Visa is an optional and secondary application which is available as an extra service to those who may want to gain residency in the USA. Should investors decide to take this step, they need to budget for an additional investment into a US business. There is no fixed amount set by the government, but it is recommended that applicants invest a minimum of $120,000 upwards and become at least a 50% shareholder in the company. This route is fast becoming more popular than the direct EB5 programme to the US which has lengthy delays and requires a much larger investment of $900,000+. It’s important to note that the E-2 visa category is not affected by the recent immigration bans announced by president Trump.
How long does the E2 Visa take to process?
The timeframe for this is usually two months from the time the E2 application and business investment are made. Applicants will be issued with a five year US residency visa with unlimited renewals.
Living in Grenada – what is that like?
Grenada is an enchanting and unspoiled tropical island located in the Caribbean. Grenada boasts the quintessential laidback Caribbean lifestyle with lush landscapes, pristine beaches, and warm and friendly people, many of which have historical family ties back to West Africa. The official language spoken in Grenada is English and the population of Grenada is approximately 112,000 people. The magnificent environment with its safe surroundings and exquisite new resorts makes Grenada an alluring destination for tourists and investors. The country is one of the most open and business friendly economies in the region and continues to grow steadily. The island has an established health care system and is home to St George’s University, one of the world’s largest American accredited medical schools, drawing students and faculty from 140 countries. It is easily accessible with a number of daily direct flights into Grenada’s International Airport from major US cities, London and a number of regional flights from the surrounding islands. The airport also offers fixed-based operator services for private jets. Grenada is close to the equator, which ensures a year-round tropical climate. Its cooling trade winds make temperatures comfortable. Most notably it is located outside of the hurricane belt.
From your own perspective why is this a much-needed opportunity for Nigerians asides chasing the American or English dream?
It’s different in that this is about access, visa free travel and a Plan B. With the direct US and UK immigration options, applicants are usually required to reside full time in the country. Many Nigerians do not wish to leave their country and relocate, they just want more flexibility. Grenada’s CBI programme has no minimum stay requirement. As it is part of the commonwealth, Grenadian passport holders are entitled to spend up to six months per year in the UK too.
How can interested parties get started with the process through La Vida Golden Visas?
La Vida’s team of expert advisors offer a free consultation to any applicants considering proceeding with a Citizenship by Investment programme. We will provide a full quotation to each client and run through the specifics of the process. To speak with one of our experienced consultants, please contact us through our website or call us on: +44 207 060 1475.
StarTimes Vs GOtv: Which is cheaper and richer in content?
Let’s compare StarTimes and GOtv and find-out which offers better value-for-money.
By Bolu Aina
Both StarTimes and GOtv are the leading affordable pay-tv options. While GOtv is an abridge (shorter version) of what DStv offers, StarTimes could best be described as a hybrid, a mid-point of combined rich content on DStv and affordable GOtv. So StarTimes is a blend of affordable and rich entertaining digital TV platform.
DStv premium bouquet has 175 channels at N18,400 monthly, GOtv’s topmost bouquet, called GOtv Max, has 90 channels at N3600. StarTimes’ classic bouquet (DTT/antenna) has 99 channels at N2500 and its Super bouquet (DTH/satellite dish) has about 120 channels at N4200.
Though criticized for its grossly limited channels and its programmes falling short of what DStv and GOtv offers, StarTimes has recently gone through brand refresh, rejigging its content offerings and now offers a richer mix of quality content at a more affordable price than DStv/GOtv.
For the sake of the major two platforms fighting for market leader in the affordability segment, let’s compare StarTimes and GOtv and find-out which offers better value-for-money.
Here are six aspects to consider:
|Bouquet||Price (N)||Total Channels||Bouquet||Price (N)||Total Channels|
StarTimes and GOtv have a rich blend of local and foreign movie channels. For local movies and series, GOtv has 5 Africa Magic channels – Family, Epic, Igbo, Yoruba and Hausa; and two ROK channels (ROK 2 & 3). In total, that’s seven channels dedicated to local movies and series. To enjoy all these channels, you need to be on GOtv Jolli at N2460 monthly. However, most of the movies and series content on Africa Magic are delayed and relayed several months later on GOtv after subscribers on DStv’s higher bouquets have seen them. BBNaija is exclusive to MultiChoice.
As per StarTimes, local movies and series channels include: PBO TV, Nollywood Plus, AMC Movies, Area Ten; four Yoruba channels – ST Yoruba, Nigbati, Kaftan Yoruba and Orisun TV; Isimbido (Igbo); and Hausa channels – Dadinkowa and Farin Wata. Another Hausa channel, Arewa 24, is on StarTimes and GOtv. The catch for StarTimes is its recently rolled out a premium Nollywood channel ‘PBO TV’, an entertainment channel dedicated to top-rated Nollywood movies, series, sitcoms and late-night comedy shows. Attractively placed on Basic Bouquet at N1700 monthly and on Smart bouquet at N2200 monthly, the channel promises to offer explosive experience like the one offered on Africa Magic showcase. True to its promise, most of its movies and series since inception are top-class Nollywood movies. But only time will tell if it can sustain the momentum.
As regards foreign movies, GOtv Jolli subscribers (N2460 monthly) have access to Hollywood movie channel, TNT Africa. StarTimes recently launched TNT Africa, also attractively placing it on Basic Bouquet at N1700 monthly and on Smart bouquet at N2200 monthly.
|HOLLYWOOD||TNT AFRICA||TNT AFRICA|
|ST MOVIES PLUS||M-Net Movies 4|
|STAR LIFE||ZEE WORLD|
|STAR GOLD||STAR LIFE|
|ST BOLLYWOOD PLUS|
|ST NOVELA PLUS||EVA+|
|ST SINO DRAMA|
3. GOtv Vs StarTimes: Sports
For Football, GOtv Max (N3600 monthly) shows one live EPL match every Saturday and one Champions League match a week, though not key matches. GOtv Max also airs all La Liga matches and Serie A matches, and some Emirates FA Cup matches as well as live sports on ESPN 1. No ESPN 1 and La Liga on lesser bouquets. If you want to watch all Emirates FA Cup matches, you need be on DStv Compact Plus at N12,400 monthly.
StarTimes’ Classic Bouquet (N2500 monthly) airs all Europa League matches, all Emirates FA Cup, all La Liga (French commentary), Bundesliga, Copa Del Rey, Coppa Italia, and ESPN 1 and 2 channels. StarTimes also spreads many matches to its lower bouquets (NOVA and Basic). Also, one EPL match is shown every week on NTA Sports 24 on StarTimes 900naira NOVA Bouquet. StarTimes Basic Bouquet (N1700) has ESPN 1 channel and a combat sports channel, Sports Arena. Live combat sports include boxing, kick boxing, Mix Martial Art, etc. Recently, StarTimes acquired the exclusive broadcast rights for Bob Arum’s Top Rank events in 2020. This will see the broadcaster air live boxing events including many world titles bouts on the roster. Top Rank’s current stable of champions represents the best the sport has to offer: Vasiliy Lomachenko, Terence Crawford, Oscar Valdez, Gilberto Ramirez, Jose Ramirez and Tyson Fury.
|EPL||1 weekly||N900/month||1 weekly||N3600/month|
|Europa League||All||From N900/month||Nil|
|Emirates FA Cup||All||N2500||Few||N3600|
|Copa Del Rey||All||N2500||Nil|
StarTimes has eight kiddies’ channels which are Jim Jam, Toonami, ST Kids, Nickelodeon, CBEEBIES, infant channel (BabyTV), Nigerian fables (Pineapple TV), and recently launched top Hollywood animation channel, DreamWorks.
GOtv has seven channels: Jim Jam, Disney Junior, Nickelodeon, Da Vinci Kids, PBS Kids, and Cartoon Networks.
If your kids have a certain affinity for Jim Jam, then StarTimes offers it cheaper on at NOVA bouquet at N900 monthly.
5. International News
With local news, both networks are on equal footing with Channels TV, AIT, NTA and TVC on their list (although Startimes holds the advantage of NTA channels in Igbo, Hausa, and Yoruba). Internationally, GOtv boasts of CNN, Aljazeera, and BBC. StarTimes has BBC, Fox News, Aljazeera, CNC and CGTN.
6. GOtv Vs StarTimes: Affordability
From the above analysis, StarTimes seems more available. StarTimes has more channels and interesting content offering than GOtv. Most of all channels and content you watch on GOtv are on StarTimes and cheaper on StarTimes. Analysis above shows that. Thus, our verdict is that StarTimes is the meeting point between DStv and GOtv. For instance, Few Emirates FA Cup matches are aired on GOtv Max (N3600 monthly). If you want to watch all Emirates FA Cup matches, you need to be on DStv Compact Plus at N12,400 monthly. Also, GOtv Max has ESPN 1, no ESPN 2. Meanwhile, on StarTimes classic bouquet (N2500 monthly), you will watch all Emirates FA Cup matches and also enjoy live sports like NBA on ESPN 1 and 2. ESPN 1 is on StarTimes N1700 basic bouquet.
When it comes to the manner of payment, StarTimes is the clear winner as it allows for daily, weekly and monthly subscriptions while GOtv only allows monthly subscription. For just 90 naira a day, you can have access to 42 channels under Startimes Nova plan. Basic Bouquet is N160 daily while Classic is N320 daily.
7. StarTimes VS GOtv: MOBILE APP
StarTimes is the best when it comes to mobile app features. In fact, the Startimes ON app can be used to watch your favorite TV programs on the go with your phone. But GOtv is yet to develop an app to help customers stream live, except for DStv subscribers who can DStv NOW. The extra benefit with StarTimes is that its streaming app (StarTimes ON) can act as standalone. If you are not a StarTimes subscriber, you can download the app and watch all live matches showing on StarTimes as low as N400 weekly.
COVID-19: Transcorp Hotel loses about N1 billion every month – CEO
Transcorp Hotels has seen its revenues ravaged by COVID-19 induced lockdowns and implementing measures to save itself from further losses.
Transcorp Hotels, owners of one of Nigeria’s largest hotel Transcorp Hilton reports it loses about N1 billion every month due to the Covid-19 pandemic.
This was disclosed by the Managing Director/CEO of Transcorp Hotel Plc, Dupe Olusola, during an interactive session on Thursday. According to her, the management of the hotel met and decided to ensure that it kept costs down by restructuring its business strategy, diversifying into asset-light business models, and reducing the workforce, among others.
Olusola further disclosed that the company had suspended further commitment to buy fixed assets and operating equipment, as well as reduced its energy consumption and maintenance costs. She also confirmed Transcorp will be cutting back on all capital investments this year and in the foreseeable future until the outlook for the economy improves.
The hospitality sector has been one of the hardest-hit since the Covid-19 broke in late February. Data from the National Bureau of Statistics also reveal the sector contracted by as much as 40% in the second quarter of 2020, officially falling into recession.
Nairametrics participated in the stakeholder’s session and noted a few critical remarks from the interview.
Below is the excerpt of the interview session:
How much has COVID-19 eaten into the fabric of Transcorp Hotels?
We had a drastic decline of over N9 billion. In March alone, we witnessed a N456 million loss. We have to remember that in March, there was a partial lockdown when everyone was trying to figure out what was happening. We were at N1.03 billion loss in April alone and this has continued to be the story every month. In June, we dropped by about N840 million.
How will this development (loss) affect your staff strength?
We struggled to ensure that we would not ask people to go initially, that was our priority. We paid staff that did not work during lockdown 50% of their salaries and the ones that worked then were paid full salary. To keep the business running, we definitely have to let go of at least 40% now.
We engaged the staff Unions, both the Junior and Senior staff, before the implementation of that. We will ensure that employees are properly taken care of. The occupancies we have now are below 30% and with that, it’s impossible to have everyone around.
What is important to us is that we must ensure we are able to keep the hotel running as a national asset, because it has been in existence for over 30 years.
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We have ensured that we keep as many jobs as we can within this time frame, so this is an opportunity for us to engage the media and carry you along before such exercise. We have engaged actively with our employees and other key stakeholders. At the occupancy level that we are seeing, it is impossible for us to sustain the employees that we have to keep our doors open.
Precisely, how many will you lay off?
It is definitely a great burden to even consider a lay-off but we don’t have a choice but to keep the business afloat. We have over 1,000 staff and it appears we will not need more than 400 staff to ensure we keep the hotel running. What is happening is beyond everybody and it is just a situation we have found ourselves in.
What is your outlook for 2020, any hope of returning to the pre-COVID era?
We expect to get to the pre-COVID era by 2024 globally, because it requires the gathering of the people in preparing for events, etc. The new normal is real. We expect things to go back to what they used to be in Nigeria by 2024 also. We are not expected to do more than 30% of our occupancy this year and that is significantly low, and by this time next year, we don’t expect to see anything more than that. So, this is our trying time.
Strategy to sustain Balance Sheet before the end of 2020
We are a hotel business, the food, room and the events we hold are our sustainers. We are definitely going to end at a loss in 2020. As I said, COVID will still be around in 2024. We will try as a business to be innovative, to look at different ways. We are reporting losses of almost N1 billion on a monthly basis and this is significant to us. We hope they can come up with some vaccination to help reduce the impact of the pandemic so that businesses can begin to pick up.
Any palliatives from the government to hotels?
Governments across the world have given palliatives to hotels, but here there is no such package for big hotels in Nigeria. We have engaged at all levels of government on payroll support, tax rebate, support for employees, actively and widely as possible. Yet, these have not yielded any support, unfortunately. This is really why we have gotten to the point of disengaging our own staff. We have not seen any support from the government to actually help us.
How do you aim to restructure your loans and are there plans to raise funds?
This year is really just about losses. We have met with our stakeholders and lenders to work out how we can restructure our loans, considering some palliatives CBN brought on board like interest rate of 5%. We met the Bank of Industry (BOI) to get interest rates on our loan reduction. Some of these got a couple of positive responses. We are also considering raising funds through the right issues. We are raising N10 billion in order to pay off some of our existing obligations.
How will virtual tools affect your business model and future plans?
We are working round the clock to bring in solutions in line with the new normal to our guests and customers. How do we provide what they are looking for? How do we provide physical and virtual conferencing? We have also come up with Drive-in Movie Cinema, among others. We are going to ensure we run asset-light strategies to bring in new initiatives that can continue to help us remain standing in the business.
On our future plans, we have suspended our expansion plans. For instance, we initially planned to set up hotels in Port-Harcourt, Rivers State, which has been suspended for now. Also, we suspended further commitment to buy fixed assets and operating equipment as well as reduced our energy consumption and maintenance costs.
Bottom Line: The hotel faces a tipping point and as things stand survival is what is its priority.
- To do so the hotel will have to make tough decisions some of which as job cuts, reduction in overheads, and suspension of capex related activities.
- This will be a very painful restructuring process for the hotel group but it appears this is the only way it can survive.