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Transcorp Hotel IPO to be allotted electronically

By on October 7, 2014

Investors in the on-going initial public offering (IPO) of Transcorp Hotels Plc, who want their shares allotted electronically would be granted the opportunity as the company plans to give all Nigerians access to the growth success of the company.

Managing Director and CEO of Transcorp Hotels Plc (THP), Mr. Valentine Ozigbo, who made this known in a chat with journalists in Lagos, stated that the company has stringent timelines set out in the prospectus to the offer that it must abide by.
THP is offering 800 million shares of 50 kobo at N10 per share via the IPO. The offer closes October 17, 2014.

The proceeds of the offer will be used to part-finance its expansion projects specifically the construction of two new flagship hotels in Ikoyi, Lagos and Port Harcourt as part of its broader expansion plans.

He also refuted claims that the Federal Government of Nigeria intends to invest more in the company because of its consistent dividend payment to the government.

According to him, government’s desire was to see the company go public so that all Nigerians will share in its profits.
He said: “I was with the Director General of Bureau of Public Enterprise (BE) when he made the comments and he never meant that government was going to invest more in Transcorp Plc. What he said was that Transcorp has consistently given government good dividend over the years. Oven before they signed the consent for this IPO they had to go through a lot of processes to convince some people of the need to make the company public. Government is not investing more in Transcorp Plc.

”As a matter of fact, there are plans for the government to sell their remaining 12 per cent to the public. But they will announce it at their own time. As far as I know what is most important for government is to see this company go public and that has been achieved. Government wants every Nigerian to be part of the company. This IPO is a fulfilment of government dream to ensure that this company gets to the public. That is why we are going through IPO window, we could have raised the money very easily through a private placement but we choose this window to give Nigerians the opportunity to be part of this company.”

On the pricing of the offer he said: “The first approach that we used was first determine how  much equity that we need, conduct proper valuation modules, using multiple factors and multiple formula. We did this with the support of three issuing houses. They used enterprise value, discounted cash flow, price earnings ratio, earnings multiple to arrive at the value we are selling at. This offer is not just going to retail investors. Nigerian and foreign institutional investors are going to participate in the offer. These people know how to do their numbers. We were very realistic on what is suitable for the company.

 

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