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Transcorp Hotels submits application to NSE for N10 billion rights issue

15 Jul 2020, 12:36 pm
Financial Nigeria
Transcorp Hotels submits application to NSE for N10 billion rights issue

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Shareholders of the company approved the rights issue last month to raise additional capital of approximately N10 billion.

Transcorp Hilton, Abuja

Transcorp Hotels – the hospitality subsidiary of Transnational Corporation of Nigeria (Transcorp) – submitted on Tuesday an application to the Nigerian Stock Exchange (NSE) for the approval and listing of a rights issue of 2,659,574,468 ordinary shares of 50 kobo each at N3.76 per share.

According to a notice on the proposed rights offering released by the NSE yesterday, the rights are being offered to existing shareholders of Transcorp Hotels to purchase additional shares in the company on the basis of seven new ordinary shares for every 20 ordinary shares held. The new shares are being offered to the existing shareholders at a discount price. As at 11:50 GMT on Wednesday, the company’s stock was trading flat at N4 per share.

During an extra-ordinary general meeting (EGM) held last month, shareholders of the company approved the rights issue to raise additional capital of approximately N10 billion. Speaking during the meeting, Managing Director and CEO of Transcorp Hotels, Dupe Olusola, acknowledged the impact of the coronavirus outbreak, which has led to a virtually total shutdown of borders. She said the hospitality industry has been one of the industries hardest hit amid the pandemic.  

“However, we are optimistic about a great recovery for the sector and your approval today shows that you also share in this mindset,” Olusola told the shareholders. “We will continue to play our part in ensuring a significant recovery to the Nigerian hospitality industry.”

Through the notice by the NSE, the bourse said it was notifying dealing members about Transcorp Hotels’ application, which was made through its stockbroker, United Capital Securities Limited. The qualification date for the rights issue was Monday, July 13, 2020.

Alexander Adeyemi, a non-executive director of the company, who represents the Ministry of Finance Incorporated on the board, said during the EGM, “Given the challenging times the hospitality industry faces, it has become critical to inject funding into the business for a stronger balance sheet. Transcorp Hotels has maintained a history of excellent performance in the hospitality industry, and this is a bold step towards the achievement of its long-term goals.”

Transcorp Hotels owns two properties in Nigeria: Transcorp Hilton, Abuja, and Transcorp Hotels, Calabar. The company is currently developing two Hilton hotels in Lagos and Port Harcourt.

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