Ikeja Hotel Plc has announced plans to raise N3.5 billion in capital via a rights issue.
The Hospitality Company (owner of Sheraton Hotel Lagos) made this announcement via a press release on the outcome of its AGM which was sent to the NGX.
At the current share price of N3.13, the sale could fetch the bank fresh capital of about N3.5 billion.
What the company is saying
Ikeja Hotel says it is to raise its additional capital by issuance of 1,133,888,945 units as the company looks to explore strategic growth.
This was disclosed in a statement signed by Company Secretary, Punuka Nominees Limited which was sent to Nigeria Exchange Limited.
An excerpt from the statement reads:
- “That additional capital be raised by the issuance of 1,133,888,945 units of unissued shares of the company as a rights issue at the rate to be determined by the board of directors to existing shareholders based on 6 (six) new ordinary shares for every 11 (eleven) ordinary shares held in the company to members on the register of members as at December 13, 2022, based on the 2022 audited accounts of the Company.”
Back Story
Ikeja Hotel Plc had in 2019 disclosed that it may be considering a capital raise sometime in the near future.
The then COO (now CEO), Theophilus Eniola Netufo had disclosed that the firm would be seeking to raise capital to rehabilitate the 1st to 4th floor of the Sheraton Lagos, as well as the public area.
- “The 5th and 6th floors were renovated in 2017. That has driven our revenue. The room rate is very high.
- “We are looking for money to renovate the 1st, 2nd, 3rd, and 4th floor and the public area. We want to move now. We want to move as quickly as possible because many hotels are coming up, and we don’t want to be caught in the web. We want to position the hotel so we can stay competitive.
- “We want to improve our banquet facilities. We see what’s happening in Lagos. (Federal Palace Hotel). We want to replicate the same thing.”
Half Year Results
In its unaudited financial results for Half Year 2023, the company’s revenue declined by 33.77% YoY to N4.57 billion as against N6.9 billion recorded in the corresponding period in 2022.
However, the company recorded a 107.3% YoY increase in pre-tax profit to N541 million from N261 million which was boosted by a rise in finance income.
An article on Ikeja Sheraton with a picture of Ibis Hotel…*scratches head*