In a move to enhance strategic growth, notably by boosting its existing facilities, Ikeja Hotel Plc has announced plans to raise N3.5 billion in fresh capital via a rights issue.
The exercise will entail the issuance of 1,133,888,945 units at the rate of 6 (six) new ordinary shares for every 11 (eleven) ordinary shares held in the company by members on the register of members as at December 13, 2022.
The announcement was made in a statement on the outcome of its AGM which was signed by Company Secretary, Punuka Nominees Limited, and submitted to the Nigerian Exchange Limited (NGX) in line with listing regulations.
At the current share price of N3.13, the exercise could fetch the bank fresh capital of about N3.5 billion, according to a report by Nairametrics.
“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,” part of the notification read.
Nairametrics reports that Ikeja Hotel Plc had in 2019 indicated that it may be considering a capital raise sometime in the near future.
It quoted the then COO (now CEO), Theophilus Eniola Netufo, as saying 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.”
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
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.
